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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.