Citigroup Trading Volumes Hurt 3rd Quarter Profits
On Tuesday, Citigroup (NYSE:C) reported its third quarter results alongside a slew of other large S&P 500 companies. The company reported its net income, adjusted for certain items, dropped to $3.26 billion, or $1.02 per share, from $3.27 billion, or $1.06 per share a year earlier. Our nations third largest bank stated its quarterly profit from ongoing businesses fell as a result of the Federal Reserve’s decision to continue its bond-buying program for longer than expected slowed trading by clients. Earlier in the year the Federal Reserve board was adamant about continuing these policies well into next year.
Under generally accepted accounting principles, Citigroup’s net income rose to $3.23 billion, or $1.00 per share, from $468 million, or 15 cents per share, a year earlier. Unfortunately for shareholders, the company’s results did come in lower than anticipated on the street. Analysts were predicting the company to report earnings excluding items of $1.04 a share on $18.62 billion in revenue, according to a consensus estimates.
Going into the fourth quarter many analysts have reaffirmed their guidance of the entire sector. Improving credit quality in combination with rising incomes and falling unemployment should help strengthen the economy. As a result, many see the financial sector as a easy vehicle for exposure to an increase in economic production. For Citigroup in particular, hopefully the company can convince its clients to take their trading volumes back up to the levels seen in prior reporting periods. Time will tell if Yellen will change the Federal Reserve’s historically lax policies. Shares of the Citigroup traded lower by 3 cents per share in early trading. The broader averages have helped to pull down a number of names on Tuesday. The S&P 500 traded lower by 6 points at the time of this writing.
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