Citigroup Tops Estimates on Lower Q3 Profit

The effect of a one-time charge was offset slightly by a tax benefit

   

Citigroup Tops Estimates on Lower Q3 Profit

Citigroup (NYSE:C) announced on Monday that it earned $468 million during the third quarter, down sharply from $3.77 billion in the same period last year. The drop in profit was attributed to a $2.9 billion charge taken to write down the value of its stake in a brokerage unit run with Morgan Stanley (NYSE:MS).

The bank also posted a $582 million tax benefit, which helped offset the charge. Analysts had forecast an un-adjusted loss of $777 million, Bloomberg noted.

 Citigroup Tops Estimates on Lower Q3 Profit
Can Banks’ Big Rally Keep Running?

Adjusted EPS came in at $1.06, up from 84 cents in 2011. That topped estimates of analysts, who were expecting adjusted earnings of 97 cents per share.

Investors liked the results. Citigroup shares rose about 3% in early Monday trading.

The bank recorded quarterly revenue of $19.4 billion, up 3% from last year.

Citigroup officials noted that revenue from fixed income products increased to $3.7 billion, topping analysts who had predicted between $2.96 billion and $3.11 billion. Equities trading revenue jumped 76% to $510 million, while investment banking posted a 26% gain, rising to $926 million.

Last month, Citigroup said it would sell its remaining stake in its Smith Barney joint venture with Morgan Stanley, prompting the write-down of the stake’s value.


Article printed from InvestorPlace Media, http://investorplace.com/2012/10/citigroup-tops-estimates-on-lower-q3-profit/.

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