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April 17th, 2009
12:26 PM ET

Citigroup posts profit… and loss

Andrew Torgan
CNN Financial News Producer

Citigroup surprised Wall Street today by delivering its first profit in more that a year… well, sort of anyway. The company reported net income of $1.6 billion during the first quarter, up from a loss of $5.1 billion a year ago.

But here’s where it gets confusing: after you factor out an accounting change and factor in dividend payments made to the government on preferred stock related to the banking bailout, Citigroup actually posted a loss of $966 million.

Since the credit markets began to unravel in late 2007, the company has posted net losses of nearly $30 billion. That led the government to take a $45 billion stake in Citigroup in the form of preferred shares and warrants to help stabilize the bank.

Also on the earnings front today, General Electric posted a first-quarter profit Friday that fell substantially from year-ago results, dragged down by weak earnings at its embattled finance division.

The company, which owns the NBC TV network and makes everything from light bulbs to jet engines, said it net income fell 35% to $2.9 billion - beating Wall Street's expectations. But revenues fell 9% to $38.4 billion, and that was a miss.

And after the closing bell Thursday, Google said first-quarter profits climbed 8.9% to $1.42 billion – topping Wall Street's forecast amid a tough advertising environment.

More disturbing news on the jobs front today… unemployment rose in nearly every state in the Union last month, with Michigan leading the way at 12.6%.

The most dramatic increase in March was in Oregon, which went from 10.7% to 12.1% - the second-highest among the states.

Oregon was followed by South Carolina, at 11.4% and California, at 11.2%.

Michigan’s job market has been hit hard by the battered auto industry. The Big Three carmakers have shed tens of thousands of jobs because of giant corporate losses and waning demand for vehicles.

Finally, now that April 15 is in the rearview mirror, are you expecting a hefty tax refund? You may have visions of plasma televisions and Hawaiian vacations. But with the economy locked in recession and the unemployment rate at a 25-year high, there might be more practical ways to spend the extra cash.

More than 70% of tax filers typically receive a refund. So far this year, the average refund is $2705, 11% higher than last year, according to data from the Internal Revenue Service.

In past years, tax refund splurges were common. But this year is different. CNNMoney.com asked a handful of personal finance experts to weigh in on how your priorities ought to stack up in today's economy.


Filed under: Andrew Torgan • Citigroup
soundoff (10 Responses)
  1. Annie Kate

    Companies posting a profit is nice to hear but then it is overshadowed by the depressing job losses and unemployment. We won't be on the way to recovery, I don't think, until our unemployment, especially the sustained unemployment lasting for weeks and months or longer, turns around and we report jobs gained. I hope for the many affected by job losses that this happens soon.

    April 17, 2009 at 7:43 pm |
  2. Mike, Zephyrhills, FL

    CEO PAY is not reducing, Big Lots CEO making $4900 an hr and employees making $7.50 an hr with out benefits. Roughly 653 Times more per hour. That used to be 15 times more or $230,000 a yr. The Good ole days.

    Just how can the Middle Class gain and stabilize with this in-balance?

    Makes me sad and just plain sick , that a discounter, isnt no deal after all!

    FYI<

    The head of closeout retailer Big Lots Inc. received compensation valued at $9.9 million in 2008, up 5.7 percent year-over-year, according to Associated Press calculations of data filed with regulators Tuesday.

    Related Quotes
    Symbol Price Change
    BIG 25.92 +0.39

    {"s" : "big","k" : "c10,l10,p20,t10","o" : "","j" : ""} Steven S. Fishman, president, CEO and chairman, received a base salary of nearly $1.2 million and a performance-based bonus of about $2.4 million, up nearly 30 percent from the prior year.

    In addition, Fishman received other compensation of $32,625, including $21,119 for an automobile allowance and other amounts for health care costs and insurance premiums.

    The bulk of his pay package came in the form of stock and option awards the company valued at $6.3 million on the date they were granted, slightly less than the $6.5 million worth of awards he received in 2007.

    The Associated Press calculated Fishman's pay according to a formula that's designed to isolate the value the company's board placed on his total compensation package during the last fiscal year. The AP formula includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

    The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

    The Columbus, Ohio-based discount retailer reported net income for fiscal 2008 of $151.5 million, or $1.85 per share, down from $158.5 million, or $1.55 per share. Annual revenue was $4.65 billion, down from $4.66 billion for fiscal 2007. However, the company has said it expects profit in fiscal 2009 will be above Wall Street estimates.

    The value of Big Lots shares fell nearly 11 percent during the 2008 fiscal year. Shares ended Tuesday up 5 cents at $24.07.

    April 17, 2009 at 5:41 pm |
  3. JayQ

    They are bleeding me dry with interest rates.

    I called Citibank, BoA, and Chevron last week. They laugh when I told them a 20% hike is to much for me.
    BoA yesterday was just rude. Told me they didn't care if I used the card. Um, I never asked for their credit card. They just sent it last year.

    I have overcome my addiction and cut up the cards. So look for these Bragging Post to end soon.

    April 17, 2009 at 4:42 pm |
  4. dina212

    This is all fixable. So sad no one sees, that this doesn't even have to be an issue. Isn't the tax refund higher this year because of the stimulus?

    April 17, 2009 at 4:04 pm |
  5. Isabel Siaba

    It seems that everything went crazy. Banks are registering profit and companies are registering loss.

    These performances of banks don't deviate from the crisis because the profit measures the cash flow, ie how much came and went from money in a given period. Since the banks took much money loaned by the government to lower interest rates, was easier to succeed temporary.

    The risk still exists about them because nobody knows the size of the bad assets not reported. The problem is stock, not flow.

    The present moment is the transition – for better or worse?

    April 17, 2009 at 2:47 pm |
  6. steve

    No surprise in bank profits, considering they now borrow at 1% and lend at 30%.

    We consumers are financing the profits with a new "Debtors' Tax".

    The sudden huge increased in credit card interest on existing balances are just that: A bank-imposed, government-sanctioned tax.

    You should investigate the incestuous relationship between consumer lenders and the 3 consumer credit rating agencies.

    Lenders pay most of the agencies' revenue and lenders benefit most from draconian credit rating methods that are geared to attract more and frequent inquiries and "justify" higher and frequent interest rates.

    April 17, 2009 at 2:39 pm |
  7. Chi Town

    It's all turning... just like every other recession we've had in this country.

    The true shame is spening a couple trillion dollars when we didn't have too... but as the Obama admin loves to say... Never waste a crisis

    April 17, 2009 at 1:23 pm |
  8. JC- Los Angeles

    In our current trophy generation where everyone receives an award regardless of accomplishment, it's hilarious to see failure applauded in all segments of today's society.

    Lose billions? great job guys; run industries into the ground? how about a few more options? clueless on Capitol Hill? how about we hit Congressional for 18 holes then blow off steam at the 19th.

    It's as if all the deplorable souls from Willy Wonka have reappeared in American leadership roles.

    It's time to finally call out all our failed leaders, take back their trophies and straighten out this mess once and for all.

    April 17, 2009 at 1:06 pm |
  9. Michael "C" Lorton, Virginia

    It is called "creative financing,"--–made this--–loss this--and the final tally is a "loss"---but let's use the profit numbers--they look better--is that after they lined their pockets?

    April 17, 2009 at 12:54 pm |
  10. meenas17

    A confusing state of affairs. Loss and profit go side by side.Job losses are mainly due to the retrenchment of three big car makers.Tax refunds, again pose a sticky problem.
    On the whole the scenario is perplexing.

    April 17, 2009 at 12:32 pm |