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Citigroup earnings preview
Citigroup is expected to report earnings this week and the only real question is how ugly will it be? The consensus estimate according to Thompson Financial is for a loss of $.96 a share. At least one analyst expects a loss of as much as $1.50 for the first quarter. The bank is expected to have to write off between $15 and $18 billion dollars again this quarter. This raises the very real possibility that Citigroup will once again have to seek outside capital to repair its tattered balance sheet. The company continues to have very high levels of exposure to both the leverage loan and subprime mortgage markets and many fear that write offs will continue throughout much of 2008.
Citigroup is in the process of overhauling management in many of it divisions and restructuring the entire company to recover from the losses it has already taken from the current credit crisis. The company has already had to take asset write downs of over $30 billion and raise $18 billion of outside capital, primarily from Foreign Sovereign Wealth Funds .They cut the dividend last year and many expect them have to reduce it further. It is also anticipated that Citigroup will have to lay off more employees this year, with the total job loss reaching as high as 30,000 jobs according to some observers.
First quarter earnings will be released before the market opens of Friday April 18 with a conference call at 8:30 am.
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