Wednesday, January 19, 2011

Citigroup to Tumble Further for the Near Future

For the short term outlook, there is a very strong possibility for Citigroup to hit the 1st support at $4.6. All the indicators point to a sell at this moment. The latest downward candle with a high volume indicates that the bear has taken full control of this stock at the moment and is owning the bull.

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 


Citigroup Inc. (NYSE: C) Tumbles as 4Q10 Falls Short of Expectation on CVA and weak trading
Citigroup Inc. (NYSE:C) tumbled 6.43% and trade close at $4.80 after the company reported 4Q10 operating EPS of 4 cents a share (including discontinued operations and CVA losses) below street estimate of 8 cents a share.
Shares of a global diversified financial services holding company with market capital of $139.44 billion traded with unusual heavy volume of 1.81 billion shares compared to daily average volume of 626.93 million shares after opening at $4.93 and trading in the range of $4.78-$4.95. The stock has 52 week trading range of $3.11-$5.15.
The company reported its fourth fiscal quarter profit of $1.31 billion, or 4 cents a share compared to a loss of $7.58 billion, or 33 cents a share a year ago.  Total revenues in the fourth quarter were $18.37 billion, compared to $5.41 billion a year ago. Analysts polled by FactSet Research had expected Citigroup to earn 8 cents a share on revenue of $20.6 billion in the fourth quarter.
The lower-than-expected results were primarily due to lower than expected revenues of $18.37 billion. The revenue figure includes a negative Credit Value Adjustment (CVA) of $1.1 billion that resulted from tightened spreads.
The Company posted net income for full year 2010 of $10.6 billion, or $0.35 per diluted share, compared to a net loss of $1.6 billion, or $0.80 per share, in the full year 2009. Revenue for fiscal year was $86.6 billion, down 5% from $91.1 billion in 2009.
Total Citigroup loans declined by 1% sequentially as management continues to spin-off non-core assets. However, Regional Consumer Banking retail loans rose by 4% to $118 billion, Citi-branded card loans rose by 3% to $114B, and average loans within Institutional Clients Group rose by 4% to $170 billion. Non-interest expenses totaled $12.5 billion, includes at least $433M of litigation reserves. Within Citigroup non-performing loans declined by 13% sequentially to $21 billion, Net credit losses declined by 11% sequentially to $6.9 billion, delinquencies continue to decline, and management underprovided by $2.4 billion.
The Company also announced that its Board of Directors has declared dividends on preferred stock as follows: 5% Non-Cumulative Convertible Preferred Stock, Series T, payable February 15, 2011, to holders of record on February 4, 2011. Holders of depositary receipts, each representing one-thousandth of a full convertible preferred share, will be paid $.8125 for each receipt held; 125% Non-Cumulative Preferred Stock, Series AA, payable February 15, 2011, to holders of record on February 4, 2011.
The Company provides consumers, corporations, governments and institutions with a range of financial products and services.

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