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A Preview Of Citigroup's Earnings

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On Friday, January 15, Citigroup (NYSE:C) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on Citigroup management projections, analysts predict EPS of $1.33 on revenue of $16.68 billion. In the same quarter last year, Citigroup reported EPS of $1.9 on revenue of $18.38 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 30.0% decline in the company's earnings. Revenue would have fallen 9.24% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.92 0.28 1.04 1.84
EPS Actual 1.40 0.50 1.05 2.15
Revenue Estimate 17.22 B 19.11 B 19.01 B 17.89 B
Revenue Actual 17.30 B 19.77 B 20.73 B 18.38 B

Stock Performance

Shares of Citigroup were trading at $66.87 as of January 13. Over the last 52-week period, shares are down 16.39%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Citigroup is scheduled to hold the call at 11:30:00 ET and can be accessed here.

 

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