Earnings Preview: Citigroup

Citigroup (C) is expected to report Q2 earnings before the market open on Friday, July 17 with a conference call scheduled for 11:00 am.

Guidance

Analysts are looking for EPS of (31c) on revenue of $22.36B. The consensus range for EPS is (76c) to (3c), while the consensus range for revenue is $19.5B to $25.15B, according to First Call. Citigroup investors may be encouraged by JP Morgan's (JPM) Q2 EPS which was better than expected. Also, American Express (AXP) reported that its net write-off rate fell in June, suggesting that credit card loans may be performing better than anticipated. Meanwhile, there have been a number of positive reports about the banking sector in recently. Earlier this week banking analyst Meredith Whitney said on CNBC that banking stocks could jump 15% in the near-term due to mortgage loan modifications. In addition, the Wall Street Journal reported on June 30 that financial firms would report "very lucrative" Q2 results.

Citigroup recently announced a series of management changes, naming a new CFO and a new CEO of its Citibank unit. There is still some speculation that Citigroup CEO Vikram Pandit could be replaced, and investors will be looking for any indications.

Analyst Views

Barclays this week predicted that Citigroup's results would be hurt by several one-time charges, including a special assessment by the FDIC. The firm reduced its Q2 EPS estimate for the company to (25c) from (15c). Barclays' analyst predicted that Citigroup would be boosted by strong investment banking, mortgage, and private bank revenue, while its retail bank and card business would continue to be weak. The company is close to reaching an agreement with the FDIC on a variety of matters, according to the Financial Times. The agreement would reportedly force Citigroup to strengthen its board and governance, improve its asset quality, better manage its expenses, and provide more information to regulators about its capital and liquidity. Investors may want to try to determine whether this report is true and how it could affect Citigroup.

Comments

[moron:]

It won't be pretty.

Jul 16 02:02 PM