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Citigroup quarterly earnings beat estimates

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Citigroup quarterly earnings beat estimates

Citigroup’s earnings beat Thursday is “the big turnaround story for the large-cap banks,” RBC Capital Markets’ Gerard Cassidy said. The third biggest U.S. bank by assets reported a 16 percent jump in quarterly profit, beating analysts’ estimates, as legal and restructuring costs plunged.Citigroup-logo12

Citi has been cutting costs and simplifying its structure by selling retail operations in a number of countries, shrinking its U.S. branch network and selling noncore businesses. ”This is … the big turnaround story for the large-cap banks, and Citi delivered on lower expenses, lower costs, and so the turnaround is continuing as expected,” said Cassidy, managing director of equity strategy at RBC Capital Markets. The bank’s shares rose more than 1 percent in early trading Thursday. Year to date, the bank’s stock is roughly in line with the performance of the S&P 500′s financial sector.

The stock is still very attractive on a valuation basis, and the earnings report is further evidence that Citi’s senior management team is making progress, Cassidy said in an interview with CNBC’s “Squawk Box.” The company posted first-quarter earnings per share of $1.52, up from $1.23 in the year-earlier period. Revenue for the quarter came in at $19.809 billion, against the comparable year-ago figure of $20.12 billion.

Analysts expected Citigroup to report earnings of $1.39 a share on $19.82 billion in revenue, according to a consensus estimate from Thomson Reuters. Legal and restructuring costs plunged to $403 million in the first quarter ended March 31 from $1.16 billion a year earlier. Like other Wall Street banks, Citi has been hit by high legal expenses related to bad mortgage dealings and trading scandals in the aftermath of the financial crisis.