Citigroup misses already dampened 4Q earnings forecasts
Citigroup (C) missed already dampened earnings expectations for the three months ended in December — making it the third bank to disappoint in just two days.
The global bank posted earnings of 6 cents a share on revenue of $17.8 billion. Wall Street analysts were expecting profits of 9 cents a share on revenue of $18.5 billion, according to data from Thompson Reuters.
Last year, Citigroup posted earnings of 77 cents per share and $17.78 billion in revenue.
Citigroup warned in December that it would account for charges of $3.5 billion in the fourth quarter, including $2.7 billion in legal costs and $800 million in repositioning costs. The bank was also hit by weakened trading revenues, due to broader market volatility — a factor that has hit banks across the board.
Citigroup shares dropped 2.1% in early trading Thursday to $47.99 a share.
On Wednesday, JPMorgan kicked off the earnings season with disappointing results, weakened by legal costs and dampened trading revenue.
Bank of America continued the trend early Thursday with earnings of 25 cents a share, down 11% from the year earlier. The Charlotte, N.C., bank said its trading revenue dropped 20% in the fourth quarter to $2.37 billion from the previous year.
Citigroup was also hurt by dampened trading revenue, thanks to volatile markets in the fourth quarter. The bank said trading revenue dropped to $2.46 billion in the fourth quarter, down 14% from the previous year. Fixed income trading revenue tumbled the most, down 16%, compared with a 2.7% drop in equities trading revenue.
Only Wells Fargo beat the trend, reporting on Wednesday that profits rose 2% for the three months ended in December. The San Francisco bank focuses more on lending and deposits than trading for revenue.