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Citigroup Inc. May Post Second Straight Quarterly Loss

Posted By admin On February 26, 2008 @ 11:24 am In Economic Crisis,Old Infowars Posts Style | Comments Disabled

Bradley Keoun and Charles Penty
Bloomberg
February 26, 2008

Countrywide
The bank may write down as much as $12 billion from the value of fixed-income assets in the first quarter, cutting earnings per share 63 percent to 15 cents from a prior estimate of 40 cents.  

Citigroup Inc., the biggest U.S. bank by assets, may post its second-straight quarterly loss and fall short of profit estimates for the year because of writedowns on home-equity loans and junk-grade corporate loans, Oppenheimer & Co.’s Meredith Whitney said.

Whitney, whose downgrade of Citigroup last year triggered an 8 percent decline in the company’s stock price, said the bank may report a loss of $1.6 billion, or 28 cents a share, for the first quarter, compared with a profit of about $5 billion, or $1.01, a year earlier. Her prediction today compares with the 45-cent per- share average gain expected by analysts surveyed by Bloomberg. Goldman Sachs Group Inc. analyst William Tanona said Citigroup may have to take a writedown of as much as $12 billion.

The rate of loan losses is “grossly underestimated by consensus estimates” at Citigroup and other U.S. banks, Whitney wrote. “Core fundamentals are rapidly deteriorating.” She cut her per-share prediction for 2008 earnings by more than 70 percent to 75 cents. The New York-based company’s shares could fall more than 36 percent to less than $16, she wrote.

Citigroup fell 38 cents, or 1.5 percent, to $24.74 at 4:10 p.m. in New York Stock Exchange composite trading. The shares have declined about 16 percent this year.

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