Citi?s Surprisingly Weak Quarter Sends Shares Sharply Lower

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Citigroup (C) missed analysts’ EPS expectations for the fourth quarter, sending shares back below $30 in pre-market trading. Trading and investment banking results lagged and expenses rose 4%.

Citi posted 38 cents of EPS on $17.2 billion in revenue. Analysts had been expecting 49 cents of EPS and $18.5 billion in revenue. Citi’s fourth quarter earnings fell from the fourth quarter of 2010, although the 2010 results were helped by changes in the value of the company’s debt.

Citi’s trading and banking results slumped, and revenue was impacted by the fact that the bank has sold assets to repair its balance sheet.

“Clearly, the macro environment has impacted the capital markets and we will continue to right-size our businesses to match the environment,” said CEO Vikram Pandit in a statement. “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.”

Shares fell 3.6% in pre-market trading, reversing some of the strong gains Citi has made this year. Citi stock had risen 17% this year through last Friday.



Original Article Source by Barrons.com

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