NEW YORK (Reuters) - Citigroup Inc (C.N) on Thursday posted a first-quarter loss, reflecting a large amount of writedowns and credit losses, as well as the impact of preferred dividends paid to the U.S. government.
The company posted a net loss available to common shareholders of $966 million, or 18 cents per share, compared with a net loss of $5.19 billion, or $1.03, a year earlier. Citigroup had lost $37.5 billion in the previous five quarters, largely from exposure to housing-related and complex debt.
Analysts on average forecast a loss of 30 cents per share, according to Reuters Estimates, although it was not immediately clear whether the figures were comparable.
Citi shares were up 16.5 percent in premarket, electronic trading.
The following is reaction from industry analysts and investors:
“On the surface, Citigroup’s first quarter results look good — they reported earning per share better than analysts expected. But after five consecutive losing quarters, it’s difficult to see the current figures as anything more than a blip, especially when it’s largely due to an accounting rule benefiting companies in distress. Increasing defaults on home and credit card loans and an outflow of funds from their wealth management business does not bode well for coming quarters.”
“So far the earnings numbers have been reassuring. We probably have turned the corner in terms of sentiment because with the passage of time, more of the process of repair for the economy is taking place.
“The two things worry me. One, the tactical risk from the earnings season or the economy producing a negative surprise and catching the market off balance and the second would be that a recovery in the markets makes policy makers complacent that they have done enough and they don’t need anything more to stimulate the economy. That would be premature.”
RICHARD HUNTER, HEAD OF UK EQUITIES AT HARGREAVES LANDSDOWN, LONDON
“The fact that all of these (banks) have had such a strong first quarter has led to some tentative hopes that perhaps the banking sector crisis is bottoming.”
MICHAEL HOLLAND, FOUNDER, HOLLAND & CO, NEW YORK
“It was slightly better than anticipated, but we probably underestimated how much government support would be a wind at their back. There’s no doubt the challenges are still enormous for Citigroup. If you put it in the context of what we heard from JPMorgan yesterday with its continuing concerns about the consumer, Citi is going to suffer, too. And Citi is heading into this from a weaker position.”
Reporting by Dan Wilchins in New York and Paul Lauener, Sitaraman Shankar and Atul Prakash in London