This report seem implausible to me..it makes one wonder if there isn't some convenient accounting practices at work....
They could be buying more time until those cost cutting measures kick in to the tune of $1B...
Citigroup Earnings Above Target
By EILEEN ALT POWELL, AP Business Writer
NEW YORK (AP) - Citigroup said Thursday its earnings rose 37 percent in the fourth quarter, narrowly beating analysts' expectations, despite charges for bad loans to Argentina and the bankrupt Enron Corp.
The Bank of New York said its earnings were down for the quarter, but still above the analysts' target. The bank took a previously announced $235 million write-off for loans related to 24 telecommunication companies and one energy trading company, which is believed to be Enron.
Citigroup - the nation's largest - was not as badly hurt by faltering loans as was another New York financial house, J.P. Morgan Chase & Co.
J.P. Morgan on Wednesday reported a loss for the fourth quarter because of write-offs of Argentine and Enron debt. Argentina has said it will default on its foreign debt to try to stabilize its domestic economy.
Late Wednesday, the Standard & Poor's rating agency lowered its outlook for J.P. Morgan to negative from stable, saying it expected the bank to be further hurt by credit problems and weakness in investment banking. But S&P left the bank's ratings unchanged.
Earlier this week, FleetBoston Financial Corp. took the unusual step of postponing its fourth-quarter earnings report until it can sort out its full exposure to Argentina.
Citigroup
Citigroup reported profits of $3.88 billion, or 74 cents a share, in the October-December period, up from $2.84 billion, or 55 cents a share, a year earlier.
Analysts surveyed by Thomson Financial/First Call had expected earnings of 73 cents for the quarter.
Citigroup said it lost $228 million before taxes in the fourth quarter on Enron dealings and $470 million because of the turmoil in Argentina.
Its shares were priced at $49.90, up $1.40 or nearly 3 percent, at the close of regular trading on the New York Stock Exchange (news - web sites).
Sanford I. Weill, chairman and chief executive, said in a statement accompanying the report that it was ``a difficult year'' because of the terrorist attacks on the World Trade Center and Pentagon (news - web sites) on Sept. 11, the global slowdown and turbulent markets.
``Citigroup has not been immune from these problems,'' Weill's statement said. ``In fact, we absorbed $1.8 billion in reduced revenues, higher losses and increased provisions as a result of Sept. 11, Enron and Argentina and still achieved record results in 2001.''
Weill later said during a conference call that Citigroup aims to cut expenses $1 billion this year ``where we think it is appropriate.''
Profits for the year totaled $14.13 billion, or $2.72 a share, up from $13.52 billion, or $2.62 a share, in 2000.
Bank of New York
Bank of New York said its earnings for the fourth quarter totaled $331 million, or 45 cents a share, down from $372 million, or 50 cents per share, a year earlier.
Analysts surveyed by Thomson Financial/First Call had predicted earnings of 44 cents.
The bank said that earnings were lowered by 5 cents per share in the quarter by the provision for the bad telecommunication and energy trading company loans minus some insurance recovery for the World Trade Center attack.
Its shares were down 8 cents at $42.76 at the close of regular trading on the Big Board.
Thomas A. Renyi, chairman and chief executive, said in a statement that some positive economic signs were emerging.
``We were encouraged by the increase in our securities servicing revenues in the fourth quarter, which we hope portends a gradual improvement in the global capital markets,'' he said.
For the year, earnings were $1.34 billion, or $1.81 a share, down from $1.43 billion, or $1.92 a share, in 2000. |
