×

Citigroup Earnings Preview: Tell Me About The Turnaround

CITIGROUP (C)

Bank with a capital "B." One of the largest banks in the world. Offers a diverse product line. Multinational. Dow component.

Reports Q1 earnings Friday 4/18 at approx. 630a ET. Conference call at 830a ET.

citi_ext2_OQ.jpg
Oliver Quillia for cnbc.com

WHAT WILL MOVE THE STOCK:

FEAR OF THE UNKNOWN - Are there any big, ugly writedowns or new credit problems on Citigroup'sbalance sheet? Fears of such losses were largely unmet by this week's financial sector earnings reports.

YOUR GUESS IS AS GOOD AS... - That said, estimates for Citigroup are all over the place: the range goes from a loss of $2.24 a share all the way up to a loss of just ten cents. The revenue figures are even worse. The low estimate is negative (yes, negative) $3.009 billion, while the high is $19.883 billion. If these numbers make you think there's little "clarity" in Citigroup's outlook, you are not alone. See estimates below for all the numbers. It's worth noting that starmine.com's "smart" EPS estimate is a loss of 74.5 cents, much better than the Thomson consensus of a 95-cent loss. Starmine's revenue forecast is $17 billion or $3.2 billion above the Thomson forecast.

JOB CUTS - How many will there be? On-air Editor Charlie Gasparino hears Citi will cut 10% of its 370,000-person workforce as part of a plan to chop costs by 20%. What else will get cut? What is CEO Vikram Pandit's turnaround strategy?

AND THEN THERE'S THE BUSINESS - Sadly, Citigroup's actual performance is this far down list of items to watch. Yes, it's important, but investors want to know where the company is going and for now, there's more to be learned from the items listed above.

ESTIMATES:

Q1 EPS loss of $0.95, revenues down 50% to $12.773 billion

Q2 EPS down 54% to $0.57, revenues down 12% to $23.504 billion

FY 08 EPS up 66% to $1.19, revenues up 12% to $91.336 billion

Source: Thomson Reuters

Year-ago actuals: Q1 EPS $1.01, Rev. $25.459 billion

*All estimates are current as of 4/17 and subject to change.*

FACTOIDS:

UGLY CHART - Citigroup shares are down 46% over the last six month and down 19% since the beginning of the year. Can you say, "Millstone around the neck of the Dow?" After your moment of schadenfreude, take a moment to consider a contrarian play. No major analyst has raised his or her price target on Citigroup since at least November.

CITI OR CITIGROUP? - So what is the correct name of this firm, Citi or Citigroup? Officially, it's Citigroup. However, many people shorten it to Citi and the bank markets some of its business under the "Citi" brand name.