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Citigroup earnings: $1.28 per share, vs expected EPS of $1.21

  • EPS: $1.28 vs. $1.21 expected by Thomson One analysts' consensus.
  • Revenue: $17.901 billion vs. $17.367 billion expected by Thomson One.
  • Citigroup's "Markets and Securities Services" revenue declined by 5 percent year over year, largely because of an 11 percent pullback in equity markets sales.

Citigroup reported better-than-expected second-quarter results Friday. The stock, however, fell 1 percent after the bank reported a slowdown in trading results.

The bank posted earnings per share of $1.28 on revenue of $17.901 billion, topping analyst expectations. That's compared to earnings of $1.24 per share on $17.548 billion in revenue in the year-ago period.

Here's how Citigroup's results compared Wall Street's expectations:

  • EPS: $1.28 vs. $1.21 expected by Thomson One analysts' consensus.
  • Revenue: $17.901 billion vs. $17.367 billion expected by Thomson One.

"The $3.9 billion of net income helped generate additional regulatory capital. Our Common Equity Tier 1 capital ratio grew to 13.0%, well above the 11.5% we believe we need to prudently operate the firm," Citigroup CEO Michael Corbat said in a statement.

The silhouette of a pedestrian holding a mobile device is seen walking past a Citigroup bank branch in San Francisco.
David Paul Morris | Bloomberg | Getty Images
The silhouette of a pedestrian holding a mobile device is seen walking past a Citigroup bank branch in San Francisco.

That said, Citigroup's "Markets and Securities Services" revenue declined by 5 percent to $4.388 billion year over year, largely because of an 11 percent pullback in equity markets sales. In a release, the bank said the decline in equities trading reflected "episodic activity in the prior year period, as well as low volatility in the current quarter."

Citigroup also said its fixed income markets revenue totaled $3.215 billion, down from $3.432 billion in the prior-year period and down from $3.622 billion in the first quarter of this year.

JPMorgan Chase — which also reported quarterly results Friday — also noted its trading revenue fell year on year.

Citigroup's loans grew by 2 percent year on year to $645 billion while deposits also climbed 2 percent to $959 billion.

Across different regions, the company's overall revenue grew 5 percent year over year in North America and 10 percent in emerging markets.

"Core businesses are performing well. We're seeing better loan performance for both the consumer and corporate businesses," said Ken Leon, bank analyst at CFRA. "I think it was a pretty solid quarter."

Shares of Citigroup have risen more than 15 percent over the past month, boosted by a sharp jump in sovereign bond yields and positive stress test results from the Federal Reserve.

Citigroup shares over past month

Source: FactSet

The benchmark 10-year note yield has jumped from approximately 2.2 percent to 2.33 percent. The move higher was triggered by hawkish rhetoric from officials at the Fed and the European Central Bank.

The Fed has signaled it intends to start unwinding its massive $4.5 trillion balance sheet later this year. The central bank is also expected to raise interest rates once more this year. The ECB, meanwhile, has hinted at the possibility of tapering its quantitative easing program sometime next year.

The bank's stock also benefited from the Fed approving stock repurchase programs for all the major U.S. banks. The Fed's blessing led to Citi announcing its biggest buyback program ever and to double its quarterly dividend.

Citigroup's first-quarter results topped analysts' expectations, helped by a jump in bond trading.

Earlier Friday, PNC Financial Services earnings also topped analysts' expectations. Wells Fargo, meanwhile, posted mixed results, with sales disappointing and earnings beating estimates.

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