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Can Citigroup Earnings Soothe the Street?

Citigroup is scheduled to report third-quarter results Thursday. The following is a summary of key developments and analysts' opinion related to the period.

Citigroup Center
AP
Citigroup Center

Overview

Of the big four U.S. banks—Citigroup, JPMorgan Chase , Bank of America and Wells Fargo —Wall Street appears most worried about Citigroup, which has been unable to turn a profit for three straight quarters.

The New York-based bank has large exposure to all types of consumer and corporate loans. It also recently lost a bid for Wachovia to Wells Fargo, which puts it behind in the race for deposits.

By the Numbers

Analysts polled by Thomson Reuters, on average, expect a loss of 70 cents per share. That would be Citigroup's fourth straight quarterly loss. Analysts expect revenue of $19.62 billion.

Analyst Take

Over the past week, there have been five downward revisions of analyst estimates for Citigroup, according to Thomson Reuters. One of them was Oppenheimer & Co.'s Meredith Whitney, who lowered both third-quarter and full-year 2009 estimates "to reflect deteriorating credit."

What's Ahead

The government recently announced plans to invest a total of $250 billion in banks—$125 billion of that amount is going into nine major banks. Citigroup is expected to get $25 billion.

Investors are curious how far that will go in boosting Citigroup's willingness to lend, or whether the bank will use the cash to acquire a smaller bank instead. Deutsche Bank analyst Mike Mayo said in a recent note that the investment will give Citigroup "the equity to buy a regional bank," and James Mitchell of Buckingham Research Group said he sees Citigroup "as a likely acquirer."

Stock Performance

Shares rose 5.9 percent during the third quarter. But over the past 52 weeks, they are down 58 percent.