Citigroup Misses Earnings Estimates and Announces 9,000 Job Cuts
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Citigroup Inc.’s (C) highly anticipated first-quarter earnings missed analyst’s expectations, as the largest U.S. bank posted its second straight loss and announced it will cut 9,000 jobs this year.
More than $16 billion in write-downs and higher consumer credit costs caused the company to record a loss of $5.11 billion, or $1.02 a share, compared with a profit of $5.01 billion, or $1.01 a share, a year earlier. Revenue fell 48% to $13.22 billion.
Reuters analysts expected an average loss of 96 cents a share and revenue of $14.35 billion.
“This is the quarter they get to clear the decks,” Arthur Hogan, chief market analyst at Jefferies & Co. in Boston, told Reuters. “(Chief Executive Officer) Vikram Pandit is coming in and making pretty big changes, and that’s what he gets to do.”
But so was the fourth quarter, with the first 4,200 job cuts.
Pandit, who assumed CEO duties in December, said the company’s financial results “reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions.”
Despite Citigroup’s loss, its stock rose more than 6% by mid-morning trading today (Friday).
Financials’ Earnings
Citigroup’s earnings cap a week that’s seen many of the nation’s biggest financial firms post mixed, though fairly cathartic, results.
On Thursday, Merrill Lynch & Co. (MER) posted its third consecutive quarterly loss – $1.96 billion, or $2.19 a share – and announced 3,000 job-cuts.
On Wednesday, JPMorgan & Chase Co. (JPM) reported profit of $2.37 billion (or 68 cents a share), more than a 50% drop from $4.79 billion (or $1.34 a share) from a year earlier.
On Monday, Wachovia Corp. (WB) beat estimates with a first-quarter loss of $350 million. Washington Mutual Inc. (WM), however, reported a $1.1 billion loss.
Bank of America Corp. (BAC) will release its earnings Monday, and expectations are low.
“Our expectation is for the economic environment to continue to be weak and for the capital markets to remain under stress,” JPMorgan CEO Jamie Dimon said Wednesday.
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Tags: BAC, Bank Of America, Chase, Citigroup, JPM, MER, Merrill Lynch, US Bank, US stocks, Wachovia, Washington Mutual, WB, WMAbout the Author
Mike Caggeso is an Associate Editor Money Morning.
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