Citigroup Quarterly Revenues Drop
Citigroup third-quarter earnings squeaked by Wall Street's projections as revenue dropped 14 percent to $11 billion as market volatility took its toll on the world's largest financial services company.
"The results were generally strong across all our consumer businesses, but show the effects of unusually severe market forces on corporate businesses and portfolios," said co-chief executives John S. Reed and Sanford I. Weill said in a statement.
In their first quarterly report since the merger of Travelers Group and Citicorp, Citigroup (CCI) posted net income of $729 million, or 30 cents a share, 1 cent better than the First Call consensus estimate.Citigroup's stock rose 1 3/16 to 46 1/2 while the New York Stock Exchange Financials Index ($NF) dipped 0.2 percent, one day after racking up a 2 percent gain.
The results compare with pro forma net income in the same quarter last year of $1.5 billion or 63 cents a share, which include a $556 million after-tax restructuring charge.
Income in its corporate unit, which includes retail operations at Salomon Smith Barney, fell by $1.4 billion from the year ago period. The group said "weakness in the global securities markets" reduced profits from investment activities to $96 million from $341 million a year ago.
On Tuesday, in a much-anticipated report, Chase Manhattan Bank (CMB) said third-quarter operating earnings fell to $738 million, or 82 cents a share, down from $1.081 billion a year ago, or $1.19 a share. Chase reported a 20 percent revenue decline in its global banking unit.
Chase's stock was up 7/16 to 53 1/2.
Wells Fargo & Co. (WFC) posted earnings of $4.03 a share against $3.26 for year-ago period, ahead of the First Call consensus estimate of $3.93 a share. Net income was $347 million against $290 million a year ago. The bank's stock edged 1 1/4 lower Wednesday to 377 1/4 after notching a 10 1/2 point gain on Tuesday.
Wells Fargo said net interest margin for the third quarter was 6.18 percent, down from the 6.22 percent posted in the second quarter, but up from 5.94 pecent in the year-ago period.
Written By Emily Church