Why Citigroup's Shares Are Down

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Shares of Citigroup (NYSE: C  ) are down sharply after the nation's third-largest bank by assets reported disappointing fourth-quarter results. The bank's earnings per share of $0.38 missed the consensus estimate of $0.51.

Looking at the income statement alone, the quarter didn't pan out well for the bank. It reported net income for the fourth quarter of $1.2 billion on revenues of $17.2 billion. This compares with net income of $1.3 billion for the fourth quarter of 2010 on revenues of $18.4 billion, declines of 11% and 7%, respectively.

The full-year results are slightly more nuanced. The bank recorded total net income for 2011 of $11.3 billion compared with $10.6 billion from a year ago, an increase of 6%. Alternatively, its full-year revenue came in at $78.4 billion, down 10% from $86.6 billion in 2010.

From a balance-sheet perspective, both the lending giant's quarter and year look much better. Its tier 1 common ratio, an important measure of a bank's financial strength from a regulator's point of view, increased by more than a full percentage point from the fourth quarter of 2010, going from 10.75% then to 11.8% now. And the bank's tangible book value per share, a core measure of value, came in at $49.81 dollars, an increase of 12% from $44.55 in 2010.

Comparing Citigroup's performance to JPMorgan Chase's (NYSE: JPM  ) results from last week, the story for banks this earnings season appears split between commercial banking and trading operations. While overall loans were up at both banks -- Citigroup's rose 14% for the quarter and JPMorgan's grew 4% -- the fear emanating from Europe continued to weigh on trading desks.

Next up in terms of earnings is Bank of America (NYSE: BAC  ) , which reports later this week. It'll be important to see whether its commercial banking operations are able to post growth, too.

Looking for a smaller, simpler bank? Check out our recently released free report detailing one bank stock that Warren Buffett may be interested in if he were a small investor. Learn the identity of this bank, for free.

Fool contributor John Maxfield owns shares in Bank of America. The Motley Fool owns shares of Citigroup, JPMorgan Chase, Bank of America, and Wells Fargo and has created a covered strangle position on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1759341, ~/Articles/ArticleHandler.aspx, 10/28/2016 2:14:18 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,108.08 -61.60 -0.34%
S&P 500 2,123.04 -10.00 -0.47%
NASD 5,188.00 -27.98 -0.54%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 1:58 PM
C $49.10 Down -0.83 -1.66%
Citigroup CAPS Rating: ***
BAC $16.56 Down -0.35 -2.07%
Bank of America CAPS Rating: ****
JPM $68.53 Down -0.70 -1.01%
JPMorgan Chase CAPS Rating: ****