Investment banking firm Citigroup (C) Friday came out with mixed results for the second quarter, when earnings rose sharply and came in above analysts’ estimates. Revenues increased modestly, aided by the strength of consumer banking, but missed expectations triggering a stock sell-off.
The banking giant said net income advanced 15% to $4.5 billion during the three-month period. On a per-share basis, earnings jumped 27% to $1.63 per share, exceeding the Wall Street forecast. The bottom line particularly benefitted from a decline in the effective tax rate, which was partially offset by a 6% increase in credit cost.
Driving the profit growth, total revenues moved up 2% annually to $18.47 billion, but missed estimates due to the muted growth rate. Net interest revenue was up 4%. During the quarter, a 20% fall in corporate and other revenues partially offset a 3% cumulative growth in revenues of the Institutional Clients Group and the Global Consumer Banking division, which registered an uptick in all geographical segments.
At the end of the quarter, the bank had $671 billion of loans, up 4% compared to the same period last year. End-of-period deposits rose 4% year-on-year to $997 billion, while book value per share remained broadly unchanged at $71.95.
Revenues increased modestly, aided by the strength of consumer banking, but missed expectations
“Our focus on expenses has given us the ability to self-fund many of our investments and resulted in an improvement in our efficiency ratio for both the second quarter and through the first half of this year,” said Citi CEO Michael Corbat.
Of late, bank stocks have been under pressure from muted yields and softness in lending. While the sector continues to benefit from the recent tax cut and higher interest rates, it is facing headwinds from the ongoing trade war.
Earlier today, Citigroup’s competitor JPMorgan Chase (JPM) reported a 22% growth in second quarter earnings, beating estimates. Among others, Goldman Sachs is scheduled to report its results on July 17.
Citi shares lost nearly 2% in early trading Friday following the earnings report, after closing the last trading session slightly higher. The stock lost more than 7% since the beginning of the year.
Related Infographics: Q1 earnings
Tyson Foods Inc. (NYSE: TSN) reported first quarter 2023 earnings results today. Sales rose 2.5% year-over-year to $13.2 billion. Net income attributable to Tyson was $316 million, or $0.88 per
Apple Inc. (NASDAQ: AAPL) this week reported its first revenue decline in more than three years, even as the high inflation continues to squeeze customers’ spending power. Sales of the
Chipmaker Qualcomm, Inc. (NASDAQ: QCOM) has reported lower earnings and revenues for the first quarter of 2023. The company also provided guidance for the second quarter of 2023. At $9.5