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Citigroup (C) Beats on Q1 Earnings, Revenues Down

Have you been eager to see how Citigroup Inc. C performed in Q1 in comparison with the market expectations? Let’s quickly scan through the key facts from this New York-based money center bank’s earnings release this morning:

An Earnings Beat

Citigroup came out with adjusted earnings per share of $1.10, beating the Zacks Consensus Estimate of $1.04.  Results were primarily aided by lower expenses, partially offset by reduced revenues.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for Citigroup depicted neutral stance prior to the earnings release. The Zacks Consensus Estimate remained stable at $1.04 over the last 7days.

However, Citigroup has a decent earnings surprise history. Before posting an earnings beat in Q1, the company also delivered positive surprises in the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 5.1% in the trailing four quarters.

Revenue Came in Lower Than Expected

Citigroup’s adjusted revenues of $17.56 billion lagged the Zacks Consensus Estimate of $17.79 billion. Also, revenues declined 11% year over year.

Key Takeaway

Adjusted Net Income stood at $3.50 billion, down 20% from the prior year quarter.

Legal and related expenses stood at $166 million, significantly down from $388 million in the prior year quarter. However, repositioning charges were $491 million, considerably increasing from just $16 million in the prior year quarter. Energy headwinds led to net loan loss reserve build of $233 million, compared to a net loan loss reserve release of $239 million in the prior year quarter.

Chief Executive Officer of Citigroup, Michael Corbat mentioned, “While our market-sensitive products clearly suffered from weak investor sentiment during the quarter, we continued to make progress in several key areas. We grew loans and deposits in our core businesses, reduced our expenses while absorbing a significant repositioning charge, utilized additional Deferred Tax Assets, and generated capital in excess of what we returned to our shareholders.”

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #4 (Sell) for Citigroup. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. Now it all depends on what sense the just-released report makes to the analysts.

Check back later for our full write up on this Citigroup earnings report!

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