Citigroup Beats Expectations for Earnings

On Friday, Citigroup posted quarterly revenue and earnings that beat Wall Street expectations in part thanks to lower corporate taxes as well as strong revenue generated through stock trading.

Revenue ended the quarter at $18.87 billion, while Wall Street was expecting $18.86 billion. Earnings per share were $1.68 while Wall Street was expecting $1.61. Net interest income reached $11.17 billion while Wall Street was expecting $11.26 billion.

Shares at Citigroup were higher in early trading on Friday but hit later in the day by a broad decline in bank stocks.

Citigroup CEO Michael Corbat said that the company’s results from the first quarter demonstrate the strength and balance the company has across its franchise and positions the company well for the remainder of 2018.

Corbat added that during the first quarter, the company returned over $3 billion in capital to shareholders which drove substantial earnings per share improvement.

The results from Citigroup were helped due to lower taxes. The first quarter of 2018 the company’s effective tax rate was 24% compared to one of 31% for the first quarter of 2017.

Citigroup’s revenue generated from its fixed-income trading fell by 7% to end the quarter at $3.4 billion, but that drop was offset by a gain of 38% in its equity trading sales. In all, trading revenue increased by 3% to just over $5 billion for the quarter. Citigroup said the rise in its revenue from stock trading was due to an increase in volatility in equity markets. In 2018 alone, the S&P 500 has seen moves of 1% or more 28 times. The index had posted only eight moves of that size in all of 2017.

Citigroup said as well that its worldwide consumer banking division had a revenue increase of more than 7% to end the quarter at $8.4 billion amidst growth in all regions.

Revenue in its North America division was up 4% ending the quarter at over $5.2 billion, while sales in Latin America reached $1.3 billion representing an increase of 15%.

However, the net interest income for Citigroup and margins came up short of Wall Street expectations.

In addition to Citigroup, Wells Fargo and JPMorgan Chase posted earnings that beat both the top and bottom lines.

Other large banks are scheduled to post earnings next week, while Netflix the video streaming giant will post its earnings on Monday April 16.

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