Citigroup Earnings: Profits Declines but Beat Wall Street Estimates (C)

Although Wall Street giant Citigroup Inc. (NYSE: C) reported a 2% dip in its fiscal first quarter profits, the struggling bank’s adjusted profits and revenues posted gains that were stronger than analysts’ estimates.

Reacting to the earnings report, the Shares of the blue-chip Company gained 2% on Monday.

The Company reported that it earned $2.93 billion, or 95 cents a share, last quarter, compared with a profit of $2.99 billion, or 99 cents a share, a year earlier. After adjusting one-time items, it earned $1.11 a share, surpassing the Street’s estimate of $1.00.

In a statement, Citigroup’s CEO, Vikram Pandit said, “While the operating environment improved in the first quarter, there is still much macro uncertainty and we will continue to manage risk carefully”.

Commenting on Company’s strategy for the future, Pandit said “We will continue to leverage the depth and the scale of our global presence to serve our clients and grow our businesses.”

The Company’s better than expected results come weeks after the bank was denied by the Federal Reserve to distribute cash to its shareholders as the central bank feared about its capital levels.

Meanwhile, Citigroup has continued to wind down its Citi Holdings –a unit which hold non-core assets. The Company said that it trimmed down non-core assets by 11%.

Citi also said that its total loan-loss allowance reduced to $29 billion, or 4.5% of total loans, compared with $36.6 billion, or 5.8%, in the year before period while its global consumer revenue climbed up 5% year-over-year to $10 billion mainly due to higher retail banking revenue.

However, revenue at Citi’s securities and banking unit dropped 12% to $5.3 billion. Fixed income revenue rose 19% to $4.7 billion even as equity markets revenue fell 18% to $902 million amid lower industry volumes.

The Company’s Investment-banking revenue soared 2% to $865 million thanks to a 19% growth in debt underwriting that canceled out a 25% fall in equity underwriting business.

Meanwhile, Company’s overall securities and banking net income dropped 28% to $1.2 billion.

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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.