Citigroup Falls after Missing Estimates

Shares of Citigroup Inc. (NYSE: C) are falling more than 3% in morning trade after the company reported fourth quarter profit below analyst estimates. The company said fourth-quarter profit dropped 11 percent, missing analysts’ targets that were looking for an increase in profit. Revenue from the stock and bond trading segments declined from  year ago levels.

Net income fell to $1.17 billion, or 38 cents a share, from $1.31 billion, or 43 cents, a year earlier, the company said today in a statement. Analysts were looking for 51 cents a share in profit. Revenue came in at $17.2 billion, a nearly 7 percent decrease from $18.37 billion a year ago. This was about $1.3 billion shy of analyst estimates.

Vikram Pandit, Citi’s Chief Executive Officer, said, “Overall, we made solid progress in 2011. We increased our net income to $11.3 billion, up 6% from the previous year, and reached key benchmarks in our consumer businesses, showing our strategy is achieving results. Clearly, the macro environment has impacted the capital markets and we will continue to right-size our businesses to match the environment. With Citi Holdings assets at 12% after the transfer of retail partner cards to Citicorp, we are increasingly focused on driving earnings through our core franchise and beginning to return capital to our shareholders this year.”

“We see this as a very negative reflection on Pandit’s ability to run Citigroup,” Jeffrey Sica, president and chief investment officer at Sica Wealth Management in Morristown, N.J., told Reuters. “They’re blaming it mostly on bond trading, which does not bode well for the future because things just won’t get better in that arena.”

“We are still a long way from Citigroup firing on all cylinders,” Richard Staite, an analyst with Atlantic Equities LLP in London, said before earnings were released. “The results continue to be impacted by both the ongoing restructuring of the business and a difficult external environment.” Staite had predicted per-share profit of 49 cents, and has an “overweight” rating on Citigroup.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.