Citigroup earnings beat expectations amid buybacks, but revenues fall

Citigroup reported mixed first-quarter results on Monday, saying its earnings were boosted by share buybacks while revenues fell amid a sharp decline in equities trading.

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Here’s how the company’s results measured up to analyst forecasts:

  • Earnings: $1.87 per share vs $1.80 expected by Refinitiv
  • Revenue: $18.576 billion vs $18.634 billion forecast
  • Fixed-income, currencies and commodities trading revenue: $3.452 billion vs $3.05 billion expected by StreetAccount
  • Equities trading: $842 million vs $930 million
  • Investment banking revenue: $1.354 billion vs $1.2 billion forecast

The bank repurchased $4.06 billion in shares in the first quarter and returned $1.08 billion to shareholders through common-stock dividends.

“Our earnings reflect the progress we are making to improve our return on and return of capital,” CEO Michael Corbat said in a release. “We remain committed to executing our strategy and continuing to make steady progress towards our financial targets.”

The company’s net interest margin also rose to 2.72% from 2.71% in the fourth quarter of 2018. Loans and deposits also grew more than expected.

Citigroup’s earnings for the quarter were 11% higher on a year-over-year basis as it also got a boost from cost-cutting efforts. However, the company’s overall revenue fell 2% following a sharp slowdown in its equity trading business.

Equity-trading revenue fell 24% in the first quarter. Citigroup said the drop reflected “lower market volumes and client financing balances.” The sharp decline was partially offset by a 20% revenue surge in investment banking revenue.

“Looking to the second quarter, we expect to return to year-over-year revenue growth,” CFO Mark Mason said during a call with analysts. “We do not expect to see the same magnitude of seasonal decline in revenues we typically see from the first quarter to the second quarter.”

Citigroup shares fell 0.1% after the banking giant released its results.

Also Monday, Goldman Sachs reported first-quarter earnings that beat analysts’ estimates but revenue dropped 13%.

Citigroup shares have been on fire this year, rallying nearly 30% in that time period. The stock is also outperforming peers like J.P. Morgan Chase, Wells Fargo, Morgan Stanley and Bank of America.

On Thursday, Citi announced the retirement of President Jamie Forese, who was considered a potential successor to Corbat.

J.P. Morgan and Wells Fargo both reported quarterly earnings on Friday that topped analyst expectations.

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