- ORIGINAL NEWS
Citigroup at risk of quarterly loss after charges come in far higher than initially disclosed
- SUMMARY
Citigroup has revealed that fees resulting from the decline of the Argentine peso and the company’s restructuring surpass the expected amount disclosed just weeks ago.
The bank’s guidance at a recent conference differs from its actual fourth-quarter results, raising concerns about its credibility with investors.
The total expenses include currency conversion losses and restructuring fees, leading to a potential $1 per share loss in Q4.
Despite skepticism, some analysts believe Citigroup’s beaten-down stock can double in value within three years.
The company aims to become leaner and more profitable through restructuring efforts led by CEO Jane Fraser.
Despite the negative impact on earnings, Citigroup affirms its medium-term targets and strategy.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“Despite his own skepticism that the bank can achieve its targets, Mayo recommends Citigroup stock, saying it is so beaten down that it can double within three years.”
Negative
“The bank said its fourth-quarter results, scheduled to be released Friday morning, were impacted by $880 million in currency conversion losses from the peso and $780 million in restructuring charges tied to CEO Jane Fraser’s corporate simplification project.”
“Those charges are significantly higher than the “couple hundred million dollars” apiece that CFO Mark Mason told investors to expect at a Dec. 6 conference hosted by Goldman Sachs.”
“Throughout the past two decades, Citigroup has been dogged by high expenses and eroding credibility after Fraser’s predecessors underdelivered on targets.”
“All told, the charges are likely to result in a $1 per share fourth-quarter loss, according to Mayo.”