American Investment banking and financial services corporation, Citigroup Inc, released its fourth quarter earnings for 2016 on Wednesday, along with other American banking companies. Citigroup posted its earnings report beating initial forecasts.
Citigroup saw a net income of $3.6 billion, or $1.14 earnings per share during the fourth quarter of fiscal 2016, beating forecasts of $1.12 per share and growing by 7% from the previous quarter and 25% versus the year-ago period. The net revenue was at $17.01 billion during the latest quarter, showing an increase of 6% compared to the same period last 2015, but still missing analysts’ forecast of $17.26 billion.
Meanwhile, the net income for the full year 2016 was at $14.9 billion with revenues of $69.9 billion, showing a decline of 13% and 8.5% compared to the prior full year report, respectively. Citigroup year-on-year revenue was down by 9% due to the absence of net gains from the asset sales in Citi Holdings, which saw a partial offset increase of 6% from the overall Citi revenues.
For the global consumer banking data, revenues rose by 2%, or $8 billion, aided by the 5% increase from the North America GCB revenues. The international consumer banking statistics showed an increase of 5% in revenues from the year earlier, while North America Consumer Banking revenues climbed 5% and a 4% increase from Asia.
The GCB net income was at $1.3 billion, losing 7% year-on-year due to the increased revenues offset by higher cost in credit. Meanwhile, the operating expenses were at $4.4 billion, surging by 3% QoQ, and 9% YoY.
During the third quarter of fiscal 2016, Citigroup was also able to beat forecasts, with reported adjusted earnings at $1.24 per share, surpassing $1.16 per share forecast, and revenues of $17.76 billion, beating $17.29 billion prediction.
Despite the positive earnings report, due to the dismal revenues result, Citigroup shares lost 1.8%, closing at $56.66 per share, during the trading session on Thursday.
As seen on the image below, last January 4, Citigroup experienced a surge in its share price, peaking at $61.62 during the trading session after moving past the company’s financial crisis. However, C Stock lost its strength in the market from then on. The company’s stock performance further lost strength with the dismal revenue for the fourth quarter, showing that the better-than-expected net income did not contribute much on the company’s performance during the trading session.
Indicated in the Relative Strength Index, the company stock is about to head level 30, which can be interpreted that C Stock is likely to start inclining in the near future after hitting the lowest level.
Even with a muted trading for Citigroup, investors should still monitor financial stocks, because even with a declining performance in recent sessions, the sector is still the top performer in the S&P 500 since the US presidential election. In that period, Citigroup shares climbed to as much as 17% in the market. In addition to that, Citi was still able to improve its profits despite continuously lowering costs of credit.
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