Citigroup posts strong trading results amid layoffs, beats profit estimates
- Citigroup reported third-quarter earnings on Tuesday morning before the opening bell.
- Both revenue and earnings per share outperformed Wall Street expectations.
- The firm saw trading results slip just 1% amid hundreds of layoffs, beating expectations for a 4% decline.
- The bank also reported fixed-income trading revenue that beat estimates and equities trading revenue that fell short of forecasts.
- Watch Citigroup trade live.
Citigroup joined its Wall Street competitors JP Morgan and Goldman Sachs in reporting third-quarter earnings on Tuesday morning before the opening bell.
The firm reported both revenue and earnings per share that exceeded Wall Street expectations. Further, Citigroup saw trading results slip just 1% amid hundreds of layoffs, beating expectations for a 4% decline.
Here are Citigroup's third quarter results compared to what analysts expected:
- Revenue: $18.6 billion, versus $18.54 expected
- Earnings per share: $1.97 versus, $1.95 expected
- Net income: $4.9 billion, versus $4.34 billion expected
- FICC trading revenue: $3.2 billion, versus $3.06 billion expected by analysts surveyed by Bloomberg
- Equities trading revenue: $760 million, versus $776 million expected by analysts surveyed by Bloomberg
- Return on equity: 12.2%
"Despite an unpredictable environment throughout the quarter, we continue to deliver on our strategy of improving shareholder returns through consistent, client-led growth while also executing against our capital plan," Citigroup CEO Michael Corbat said in a prepared statement.
Citigroup's gain in fixed-income trading came from stronger demand from both corporate and investor clients, as well as improvements in rates and currencies, the bank said.
Revenue grew 1% from the same period last year thanks to a $250 million sale of an asset management business within its Global Consumer Banking division in Mexico.
Earnings per share outperformed estimates due to a 10% reduction in shares outstanding and a lower effective tax rate.
Heading into the earnings report Wall Street analysts were paying close attention to Citi's expenses as it works toward its goal of 12% return on equity for the year.
The bank also laid off hundreds of employees in its trading division earlier this year as the entire industry faces declining revenues.
Most Wall Street banks have also struggled to grow profits amid historically low interest rates. The US Federal Reserve delivered its second rate cut since the 2008 financial crisis in September.
Citi is one of the first major banks to report earnings this week along with Goldman Sachs and JP Morgan. Wells Fargo, Morgan Stanley, and Bank of America are all expected to report Q3 results this week as well.
Shares of Citi were up 35% year-to-date through Monday's close.
