Citigroup (C) Q4 Earnings Beat, Records One-time Tax Charges

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Have you been eager to see how Citigroup Inc. C performed in Q4 in comparison with the market expectations? Let’s quickly scan through the key facts from this New York-based money center bank’s earnings release this morning:

An Earnings Beat

Citigroup came out with adjusted earnings per share of $1.28, surpassing the Zacks Consensus Estimate of $1.19. Further, the figure compared favorably with earnings of $1.14 in the prior-year quarter. Including non-recurring non-cash charge related to the tax reform, the company reported loss per share of $7.15.

Improvement in earnings was primarily driven by higher revenues and slightly lower expenses.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for Citigroup depicted neutral stance prior to the earnings release. The Zacks Consensus Estimate remained unchanged over the last seven days.

Also, Citigroup has a decent earnings surprise history. Before posting earnings beat in Q4, the company also delivered positive surprises in the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 6.23% in the trailing four quarters.

Citigroup Inc. Price and EPS Surprise

Citigroup Inc. Price and EPS Surprise

Citigroup Inc. price-eps-surprise | Citigroup Inc. Quote

Revenue Came in Higher Than Expected

Citigroup’s revenues of $17.3 billion outpaced the Zacks Consensus Estimate of $17.1 billion. Moreover, revenues increased 1% year over year.

Key Takeaways

  • Recorded estimated one-time, non-cash charge of $22 billion, or $8.43 per share, associated with the enactment of the Tax Cuts and Jobs Act.
  • Excluding the impact of tax reform, net Income stood at $3.7 billion, up 4% from the prior year quarter.
  • Costs of credit surged 16% year over year to $2.1 billion.
  • Returned around $6.3 billion to shareholders as common stock repurchases and dividends during the quarter.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Citigroup. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here . )

How the Market Reacted So Far

Following the earnings release, Citigroup shares were up more than 2% in the pre-trading session. This is in line to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Citigroup earnings report!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Referenced Symbols: C
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