After delivering positive earnings surprises in the prior three quarters, Citigroup Inc. (C - Analyst Report) failed to keep the winning streak alive. Adjusted earnings per share for fourth-quarter 2014 came in at 6 cents, missing the Zacks Consensus Estimate of 9 cents. Further, earnings came significantly below the year-ago figure of 82 cents per share.
Including the impact of credit valuation adjustment (CVA) and debt valuation adjustment (DVA), Citigroup reported net income of $350 million which was significantly down from $2.5 billion reported in the prior-year quarter.
Following the earnings release, investors have been bearish on the results as shares of Citigroup fell 2.7% in the beginning of the trading session. However, the price reaction during the full trading session will give a better idea.
For the year ended 2014, adjusted earnings per share came in at $3.55, beating the Zacks Consensus Estimate of $2.20. However, it compared unfavorably with the prior year figure of $4.37 per share.
Adjusted costs of credit for the fourth quarter at Citigroup were down 3% year over year to $2.0 billion. The improvement was primarily attributable to a decline in net credit losses, partially offset by lower net release of loan loss reserves.
Performance in Detail
Adjusted revenues of Citigroup came slightly lower than the prior-year quarter to $17.8 billion. Also, the revenue figure missed the Zacks Consensus Estimate of $18.7 billion.
Excluding CVA/DVA, Citigroup revenues decreased 1% from the prior-year period to $17.8 billion. The decrease reflected a 1% decline in revenues of Citicorp, which was partially offset by a slight rise in revenues of Citi Holdings.
