Taking a Bite Out of Citigroup on Earnings

The miss is being placed $1.1 billion in charges tied to tightening of its credit spreads.  If you eliminate the charges, the earnings figure would have looked in-line with estimates.  Coming in at half of estimates is likely to pressure shares whether there are items or not, particularly after a more than 40% gain in Citigroup shares over the last year.

Citigroup also recorded a drop of about 11% at $6.9 billion in quarterly credit losses and it also released about $2.3 billion in prior loan loss reserves that went into earnings. After gains and losses on credit reserves, the total loss provisions came to $4.8 billion.

Shares of Citigroup had a close of $5.13 and shares have come back to the best levels since August 2009.  The pre-market reaction has shares down 3.3% at $4.96 so far this morning.

JON C. OGG