Will Citigroup Inc (C) Results Be In-Line or Above Expectations?


Citigroup Inc (NYSE:C) will announce its financial numbers on April 16 before the market opens. Stronger loan growth, and trading volumes in addition to less legal liability  is expected to propel bank earnings. On the consumer side, bank balances and spending should be higher with lower oil prices. In the last three quarters earnings have in below Street analysts’ estimations.

Currency Impact

Though the banking stocks have languished compared to the broader index, the banks were said to be the beneficiary of currency impact apart from the commodities trading income. Being one of the big banks with a wider presence, Citigroup Inc (NYSE:C) would have benefited from the Greenback strength witnessed in the last few months. This should help in generating better than expected trading income.

Deutsche Bank analysts, Robert Placet and Matt O’Connor, believe that regulatory headwinds could be offset by increased markets activity, as well as, fixed income. The analysts’ also said that the Fed would not increase interest rates till the economy gets stronger. In the absence of an increase in interest rates, banks were running tight on margins and there was little room to adjust the tight margins too.

Unlike the previous time, Citigroup Inc (NYSE:C) succeeded in getting the approval of the Fed to buy back its shares worth $7.8 billion. Fed rejection in the previous year came on the back of a failure in the stress test. However, there was no such thing this time around leaving hope that 2015 could a year of progress for the bank.

Expectations

Wall Street analysts’ are predicting the company to report earnings of $1.39 a share and revenue of $19.82 billion for the March quarter. Last year, Citigroup Inc (NYSE:C) earned $1.23 a share and revenue of $20.12 billion. This meant that analysts’ are estimating 13% growth in EPS while expecting revenue to fall 1.5% in the first quarter. Its earnings came in above the market expectations only once in the last four quarters and that too was in March quarter 2014. Will it repeat this time to reverse the trend?

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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