Citi Falls Short on Earnings; Blames New Regulations
Citigroup badly missed earnings estimates in the fourth quarter, reflecting what its new CEO called a "challenging" environment due to increased regulatory pressures and legal costs.
Citi said it made 69 cents a share excluding items, against analyst expectations of 96 cents. Revenue also was light, coming in at $18.66 billion against projections of $18.82 billion.
This is Citigroup's first quarterly release with new CEO Michael Corbat at the helm after Vikram Pandit's abrupt departure stunned Wall Street in October.
"Our bottom line earnings reflect an environment that remains challenging- with businesses working through issues like spread compression and regulatory changes - as well as the costs of putting legacy issues behind us," Corbat said in a statement.
Last month, Citigroup announced plans to slash 11,000 jobs and close branches worldwide as part of a broad restructuring effort it hopes will save about $1.1 billion in expenses.
The company posted $2.32 billion of charges for layoffs and lawsuits.
Net income was $1.2 billion, or 38 cents a share, compared with $956 million, or 31 cents a share, in same quarter of 2011.
Results were reduced by new legal costs of $1.29 billion, or 27 cents a share, and a previously announced corporate restructuring charge of $1.03 billion, or 21 cents a share.
Expenses recorded for changes in the value of some of the bank's debt and obligations of derivatives counterparties were 10 cents a share, compared with 1 cent a year earlier.
-Reuters contributed to this report.