Courtesy of Pam Martens
If you’ve ever mucked horse stalls full of smelly manure, you’re better prepared for this week.
Yesterday, the inscrutable Citigroup ushered in the week of mind-numbing fourth-quarter earnings reports from the financial supermarkets/commercial banks/insurance companies/brokerage firms/investment banks/derivative warehouses that have combined under one highly combustible roof, using the simple moniker Wall Street bank. There is so much going on under one roof that you’d need your own team of 100 accountants to have any clue as to whether the bank is doing well or not.
JPMorgan Chase, a component of the Dow Jones Industrial Average, was out with its disappointing earnings this morning. Goldman Sachs and Bank of America report on Wednesday, followed by Morgan Stanley on Thursday.
Citigroup’s big reveal was that it had missed analysts’ revenue expectations by half a billion dollars – not exactly small change. The bank reported $17.1 billion in revenue in the fourth quarter versus average analyst expectations for $17.6 billion. That was mostly owing to a 21 percent decline in fixed income trading.
Its net profits were clearly helped by its report that it had used a big chunk of its capital not to make loans to worthy businesses but to repurchase 74 million shares of its own stock in the fourth quarter and a whopping 212 million shares for all of 2018. Fourth quarter net earnings came in at $4.3 billion or $1.64 per share. Excluding the impact of President Trump’s generous tax cut gift to corporations, net income was $4.2 billion or $1.61 per share.
For the full year of 2018, Citigroup reported net income of $18.0 billion on revenues of $72.9 billion, compared to a net loss of $6.8 billion on revenues of $72.4 billion for the full year of 2017.
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