Nation's No. 1 financial services firm's operating income up 14% in period, boosts dividend 75%.
Citigroup reported improved second-quarter earnings Monday that beat Wall Street expectations for the period and hiked its dividend by 75 percent.
The nation's largest financial services company earned $4.3 billion, or 83 cents a share, from continuing operations, up 14 percent from the $4.1 billion, or 73 cents a share, earned on that basis a year earlier. Analysts surveyed by earnings tracker First Call were looking for earnings per share of 80 cents in the period.
Net revenue, which reflects revenue less interest expense, was up 8 percent to $19.4 billion from just under $18.0 billion a year earlier, topping First Call's forecast of $18.9 billion. Year earlier revenue and income numbers exclude results from Travelers Property and Casualty insurance, which was subsequently spun off by the company.
Results were led by the company's global consumer business, which saw a 9 percent rise in net revenue to $10.1 billion and an 18 percent rise in income to $2.3 billion. Within that unit, retail banking was the leader, posting a 24 percent rise in revenue to $4.2 billion and a 63 percent gain in income to $1.0 billion.
Corporate and investment banking posted a more modest 7 percent rise in net revenue to $5.4 billion and a 2 percent gain in income to $1.4 billion. The unit saw record performance in its fixed income business, which offset lower equities revenues.
The company's international business saw income rise 8 percent to $1.3 billion. Most regions of the world other than Japan and Latin America saw improved results.
Income from private client services fell 19 percent to $181 million, due to what the company termed difficult equity market conditions, despite the best quarter for the Standard & Poor's 500 stock index since 1998. Citigroup said its global investment management business saw income increase 16 percent.
The company raised its common share dividend to 35 cents a quarter from 20 cents, payable Aug. 22 to shareholders of record as of Aug. 4. Citigroup's statement said that the new, higher dividend will come at the price of less share repurchases by the company.
"The recent change in the tax law levels the playing field between dividends and share repurchases as a means to return capital to shareholders," said the statement, referring to the tax law that makes dividends tax free. "This substantial increase in our dividend will be part of our effort to re-allocate capital to dividends and reduce share repurchases." The company said it is the largest increase in its dividend since it started paying one in 1986.
Shares of Citigroup (C: Research, Estimates), a component of the Dow Jones industrial average, gained $1.20 to $47.35 in pre-market trading Monday following the report and dividend increase. Shares were up 95 cents in regular-hours trading Friday.
Citigroup reported improved second-quarter earnings Monday that beat Wall Street expectations for the period and hiked its dividend by 75 percent.
The nation's largest financial services company earned $4.3 billion, or 83 cents a share, from continuing operations, up 14 percent from the $4.1 billion, or 73 cents a share, earned on that basis a year earlier. Analysts surveyed by earnings tracker First Call were looking for earnings per share of 80 cents in the period.
Net revenue, which reflects revenue less interest expense, was up 8 percent to $19.4 billion from just under $18.0 billion a year earlier, topping First Call's forecast of $18.9 billion. Year earlier revenue and income numbers exclude results from Travelers Property and Casualty insurance, which was subsequently spun off by the company.
Results were led by the company's global consumer business, which saw a 9 percent rise in net revenue to $10.1 billion and an 18 percent rise in income to $2.3 billion. Within that unit, retail banking was the leader, posting a 24 percent rise in revenue to $4.2 billion and a 63 percent gain in income to $1.0 billion.
Corporate and investment banking posted a more modest 7 percent rise in net revenue to $5.4 billion and a 2 percent gain in income to $1.4 billion. The unit saw record performance in its fixed income business, which offset lower equities revenues.
The company's international business saw income rise 8 percent to $1.3 billion. Most regions of the world other than Japan and Latin America saw improved results.
Income from private client services fell 19 percent to $181 million, due to what the company termed difficult equity market conditions, despite the best quarter for the Standard & Poor's 500 stock index since 1998. Citigroup said its global investment management business saw income increase 16 percent.
The company raised its common share dividend to 35 cents a quarter from 20 cents, payable Aug. 22 to shareholders of record as of Aug. 4. Citigroup's statement said that the new, higher dividend will come at the price of less share repurchases by the company.
"The recent change in the tax law levels the playing field between dividends and share repurchases as a means to return capital to shareholders," said the statement, referring to the tax law that makes dividends tax free. "This substantial increase in our dividend will be part of our effort to re-allocate capital to dividends and reduce share repurchases." The company said it is the largest increase in its dividend since it started paying one in 1986.
Shares of Citigroup (C: Research, Estimates), a component of the Dow Jones industrial average, gained $1.20 to $47.35 in pre-market trading Monday following the report and dividend increase. Shares were up 95 cents in regular-hours trading Friday.
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