Citigroup Inc. (NYSE: C), the beleaguered financial giant with a completely ineffective CEO at the helm, will report quarterly earnings (or losses) tomorrow. Most likely, we will see yet another company taking steep losses due to bets on mortgage-backed securities and other goofy investments. When Citigroup kicked former CEO Chuck Prince out the door, his replacement was even more strange. Citigroup is floundering to this day, although I have no doubt the banking and investment giant will recover.Citigroup's shares are currently at the lowest level since the company was formed a decade ago. It announced the sale of its German banking business for $7.7 billion just last week, and now analysts polled by Zacks are expecting a net loss of $0.42 per share when the finance behemoth announces quarterly results this Friday. Reuters estimates that losses could go as high as $0.60 per share. Regardless of the loss, either would be quite a drop -- over 134% to be exact -- from the company's year-ago EPS figure of $1.24.
What will Citigroup do? Well, it will continue digging itself out of the hole it's responsible for, just like every other finance company that bet the shaky farm on every Tom, Dick and Harry getting a $600,000 mortgage with a $50,000 annual income. In addition to selling off some assets in Germany, Citigroup is shedding some Japanese assets as well as saying it may be two or three years before its returns come back to favorable levels.
Do you own Citigroup shares? If so, are you holding on for the long run or have you sold them already?
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Reader Comments (Page 1 of 1)
7-16-2008 @ 1:40PM
Stock Investor said...
I think Citi is not out of the woods yet but will recover in the long term. It started getting rid of some of its troublesome and slow growth, non core assets. Once the economy comes rebounds and all the bad news in the financial sector is flushed out, C (as well as the whole financial sector) would be an excellent bargain at these prices.
Stock Haven
http://stockhaven.blogspot.com
7-16-2008 @ 1:59PM
Jerry Nemiroff said...
I currently own 266,000 shares and am holding at this time. I have yet to sell even one share. I am waiting for earnings to be reported on Friday in order to better evaluate my position.
7-16-2008 @ 5:32PM
wayne kilpatrick said...
Put George David (UTC) in charge of Citigroup and things will get fixed.
7-16-2008 @ 6:34PM
Sal said...
For people to continue to hold massive positions in Citi thru the past year have alot more gutts than brains
Last year, during the 1st half, I divested every last share of Citi I owned, at between $52.80 and $53.80.
You can talk Capital Gains and taxes till the cows come home, but in the last 12 months you are down 71%. Still "evaluating" your action plan is like closing the barn doors after the horses have run away.
If you are holding Citi now, you are basically married to the stock for at least the next 18 months.
Good Luck,
Sal
7-16-2008 @ 7:36PM
Andrea said...
I think Pandit hasn't really been completely ineffective. He is turning citi around and is rebuilding the company just like he needs to, without causing any disruptive changes. This turn around story that Pandit is weaving at citi is comparable to what was done at Well Fargo a few decades ago. If citi sticks with Pandit, it will emerge as an better, stronger and intrinsically robust organization.
While citi turns around, I am beginning to worry about Lehman and JPM. Those Bear Sterns bad debts will come back to haunt JPM pretty soon, infact is it a good time to sell JPM? or should we ride the Dimon popularity wave for a couple of more months before dumping JPM?