Thursday, January 20, 2011

Citigroup Reports Lackluster Q4 Earnings (Financial Charts, Review) *EPS $0.04* C

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Citigroup reported Q4 2010 financial results on Tuesday, January 18, 2011

Citigroup Reports Lackluster Earnings Fourth Quarter 2010

Citigroup reported quarterly financial results on Tuesday, January 18 before the market opened. Citigroup financial performance charts for Q4 2010 and prior quarters have been posted, along with commentary, on the Citigroup Financial Performance page. The charts are:

Citigroup Performance by the Quarters
Earnings per Share (Diluted)
Net Revenues, Operating Income, Net Income
Operating Margin, Net Margin
Capital to Assets Ratio, Tier 1 Capital Ratio
Return on Assets
Income Statement Components

In addition, a Bonus Chart has been included below in this post, Citigroup's Operating Expense Ratio. More charts have been posted on the Citigroup Financial Performance page.

Summary Overall, Citigroup continues as a break-even operation, barely eking out a profit, and overall performance has decreased the past 3 quarters from a peak in Q1 2010. Compared to the dismal financial results in 2007, 2008, and 2009, the current Q4 2010 performance is better but downtrending, and therefore not recovering as expected.

Income Statement Q4 2010 Citigroup financial performance deteriorated with net revenues of $18.4B, net income of $1.3B, and earnings per share $0.04. From the prior quarter Q3 2010, net revenues were down -11.4%, net income was down -39.6%, and earnings per share was up +112.1%. From the prior year Q4 2009, net revenues were up +239.89%, net income was up +117.3% (from -$7.6B to $1.3B), and earnings per share was up +125.9% (from -$0.33 to +$0.04). Operating and net margins were down from the prior quarter Q3 2010 and have decreased for 3 quarters, but are up significantly from the prior year Q4 2009 when they were negative.

Credit Value Adjustment Citigroup reported a $1.04B CVA loss in the Securities & Banking division. This was essentially a write-down of bond holdings to market value as a result of rising interest rates and therefore decreasing bond values. This cut Citigroup's net income by almost 50%.

Balance Sheet Q4 2010 Citigroup total assets are $1.914 trillion, a decrease of -3.5% from the prior quarter Q3 2010 but an increase of +3.12% from the prior year Q4 2009. Citigroup last had total assets of greater than $2 trillion in Q1 2010, just for that quarter. Previously total assets dropped below $2 trillion in Q3 2008 and have remained below with the exception of Q1 2010. The capital to assets ratio (stockholder's equity to total assets) is 8.66% which is much improved from 2007 and 2008 and a multi-year high. The financial regulatory Tier 1 capital ratio is 12.90% which is also much improved from prior years and a multi-year high.

Citigroup Bonus Chart!
Citigroup Performance by the Quarters (Operating Expense Ratio)

Citigroup Operating Expense Ratio (Chart) Below is a chart of the operating expense ratio for Citigroup. The operating expense ratio is NonInterest Expense divided by Total Revenues which are NonInterest Income and Interest Income. There have been 3 consecutive quarterly increases which is a negative trend. An increasing share of each dollar of revenues is being spent on operating expenses. Ultimately a continuation of this trend will affect profitability and already has. The chart covers the past 8 quarters, from September 2009 through the latest quarter reported, December 2010. More charts have been posted on the Citgroup Financial Performance page. Recent chart data is:
Quarter, Operating Expense Ratio
Dec09: 103.07%
Mar10: 36.32%
Jun10: 41.71%
Sep10: 42.88%
Dec10: 51.03%

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