Citigroup Inc NYSE: C has been moving on strong bullish rally from last few weeks. Its highly anticipated fourth quarterly results for the period ending December 31st, 2010 was the main reason behind its high traded volumes and consistent bullish activity. The current bullish activity of Citigroup happens to be very significant as the stock has crossed its psychological resistance of $5 for the first time in last three years.
The share price last closed on $5.13 on January 14th, 2011 with traded volume of 1.03 billion shares as compared to the average volume of 626.93 million shares per day. As for today the Citibank has been under selling pressure since it per market session. The share price has already declined by 4.97 percent to $4.88 on the official announcement of fourth quarter financial results.
Though Citibank has reported net profit of $1.3 billion resulting in earnings of $0.04 per share for the quarter ended December 31st, 2011 as compared to net loss of $7.6 billion resulting in loss of $0.33 per share for the same period last year, still the bullish rally could not sustain itself in the market today.
Investors were hoping for much better financial figures as analysts forecasted the net income of $2.2 billion or earnings of $0.08 per share with projected the revenue of $20.3 billion for the fourth quarter. Whereas investor were expecting net income of $11.6 billion for the quarter for the 12 months ended December 31st 2011.
The bank has reported a substantial increase of 239 percent in its total revenue to $18.37 billion for the fourth quarter as compared to revenue of $5.41 billion for the same period last year. As for the 12 months ended December 2010 the company reported the net profit of $10.6 billion or earnings of $0.35 per share as compared to net loss of $1.6 billion resulting in loss of $0.80 per share for the last
The expectation of analysts and traders were not unreasonable. If you look at financial figures of prior quarters in 2010 the Citibank reported the net profit of $4.2 billion for the first quarter ended March 31st, 2010. The bank reported the net income of $2.69 billion for the quarter ended June 30th, 2010 followed by earnings of $2.16 billion for quarter ended September 30th, 2010.
Citibank's’s net profit has been decreased by 66 percent in the fourth quarter if compared with prior quarter. Keeping in view the company earnings in the first three quarters of 2010 the projections for fourth quarter by analysts cannot be categorized as unreasonable expectations.
However the positive point is that bank financial position is much better condition as compared to the last year but as per its market sentiments which are shaken due to less than expected financial results the share price could experience more correction in coming sessions.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.