Citigroup Beats Q1 EPS Estimate, Lags on Revenue



Key takeaways

Citigroup (C) posted mixed first-quarter results on April 15. Citigroup surpassed analysts’ EPS expectation on the back of operating leverage, share buybacks, and a lower effective tax rate. However, its revenue fell short of analysts’ expectation, reflecting lower equity market revenue. Shares of Citigroup were trading ~1% higher in the premarket session.

In comparison, Goldman Sachs (GS) also posted mixed first-quarter results. The bank’s revenue fell YoY (year-over-year) and came in below analysts’ consensus expectation. However, Goldman Sachs handily surpassed analysts’ EPS estimate on the back of lower expenses and share repurchases. On Friday, April 12, JPMorgan Chase (JPM) posted stronger-than-expected first quarter results driven by growth in loans and deposits, a lower effective tax rate, and share buybacks.

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Citigroup’s operating expenses fell 3% during the first quarter, reflecting efficiency savings. Citigroup’s efficiency ratio improved 90 basis points to 57.0% YoY, which was impressive. However, lower revenues and higher credit costs remained a drag on its first-quarter earnings.

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First-quarter financials

Citigroup posted revenue of $18.6 billion, a decrease of ~2% YoY, and fell marginally short of analysts’ consensus estimate, reflecting lower equity market revenue. Citigroup posted EPS of $1.87, up ~11% YoY driven by lower expenses, a decline in the tax rate, and share repurchases.

Citigroup’s effective tax rate was 21% in the first quarter of 2019 compared to 24% in the previous year’s period.


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