Citigroup Inc. (NYSE: C) – Q1 FY 2011 Earnings Preview
Friday, April 01, 2022 2:00 PM



Citigroup Inc. (NYSE: C) is expected to report its first quarter FY 2011 earnings on April 18, 2011. For three quarters ended December 2010, Citigroup earnings have beaten analysts' consensus estimates for the quarter ended June 2010 and September 2010 by margins of 80 percent and 16.70 percent, respectively. However, for the quarter ended December 2010, reported earnings missed analysts' estimate by a margin of 50 percent.

Citigroup Inc. is a global diversified financial services holding company whose businesses provide consumers, corporations, governments and institutions with a broad range of financial products and services. The company operates in three different segments. The first segment is Citicorp under which two sub segments fall in, Regional consumer Banking and Institutional Clients Group. The second segment is Citi Holdings and the third segment is Corporate/Other.

Citigroup reported net income for 2010 of $10.6 billion, compared to a net loss of $1.6 billion in 2009. Diluted EPS was $0.35 per share in 2010 versus a loss of $0.80 per share in 2009, and net revenues were $86.6 billion in 2010, versus $91.1 billion in 2009, on a comparable basis. For the fourth quarter of FY 2010, Citi reported net income of $1.3 billion, or $0.04 per diluted share, compared to a net loss of $7.6 billion, or $0.33 per diluted share, in the fourth quarter 2009. Citigroup revenues for the quarter were $18.4 billion and included negative Cash Value Added or CVA of $1.1 billion. Excluding CVA, revenues of $19.5 billion were down 6% from the prior quarter.

During the first quarter of FY 2011, Citi acquired 100 percent EMI Group Ltd. share capital on February 1, 2011. Following the acquisition Citi completed a successful recapitalization of EMI to provide the company financial strength and stability. EMI’s debt was reduced to $1.9 Billion from $5.48 billion after the acquisition representing 65 percent decrease in Debt. The recapitalization consisted in a debt-for-equity swap by Citigroup. EMI was sold along its holding company Maltby Acquisitions Limited by the newly appointed administrators Maltby investments Limited, Peter Spratt and Tony Lomas.

On January 18, the company declared dividends on its preferred stock, the details are as follows:

  • 6.5% Non-Cumulative Convertible Preferred Stock, Series T, payable February 15, 2011, to holders of record on February 4, 2011. Holders of depositary receipts, each representing one-thousandth of a full convertible preferred share, will be paid $.8125 for each receipt held.
  • 8.125% Non-Cumulative Preferred Stock, Series AA, payable February 15, 2011, to holders of record on February 4, 2011. Holders of depositary receipts, each representing one-thousandth of a full preferred share, will be paid $.5078125 for each receipt held.
  • 8.50% Non-Cumulative Preferred Stock, Series F, payable March 15, 2011, to holders of record on March 4, 2011. Holders of depositary receipts, each representing one-thousandth of a full preferred share, will be paid $.53125 for each receipt held.

Later in the quarter, on March 21, Citi announced a 1-for-10 reverse stock split of Citigroup common stock. Citi also announced that it intends to reinstate a quarterly dividend of $0.01 per common share in the second quarter of 2011, following the effective date of the reverse stock split. Citi anticipates the reverse stock split will be effective after the close of trading on May 6, 2011, and that Citi common stock will begin trading on a split adjusted basis on the New York Stock Exchange (NYSE) at the opening of trading on May 9, 2011.

For the first quarter, analysts’ EPS estimate range from a low of $0.05 to $0.15 per share, compared to the consensus estimate of $0.10 per share or $0.15 in the year ago quarter. For this quarter, analysts’ revenue estimates range from a low of $19.35 billion to a high of $23.10 billion, compared to a consensus estimate of $20.96 billion or $25.42 billion in the same quarter a year ago. For the quarter ending March 31, 2011, the consensus EPS forecast has been unchanged for the last 90 days at $0.10 per share.

In the last 52 weeks, Citi stock has been trading in the range of $3.53 and $5.15. The last trading price of the stock is $4.45 on March 30 on the New York Stock Exchange.


 

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