Expiration Earnings - GOOG, GE, C

As if it weren’t enough fun trading equity options during a financial crisis so great that the government had to get in the mix, a few companies like to make things interesting by reporting earnings right before expiration Friday.

· GE reported first quarter profit of $2.82 billion, down from $4.35 billion a year ago. Revenue declined 9% to $38.4 billion. Decent results from GE’s industrial operations, with revenues that declined only 1% helped offset problems with GE Capital (profits down 58%), NBC Universal (profits down 45%) and consumer businesses (profits down 75%.) Although the stock is up on earnings that were “better than expected”, the real story will be revealed when the 10-Q is released.
· Citigroup posted earnings instead of losses for the first time in 18 months. The beleaguered bank, the beneficiary of a “way too big to fail” designation by the government, made $1.59 billion in the first quarter. Of course, $2.5 billion of that profit was due to a decline in the value of the bank’s own debt. More juicy details to come about the true state of affairs after the results of the stress tests and its balance sheet are released in May.
· Meanwhile, in Techland, Google reported actual earnings, real earnings, old- school non-accounting shenanigan style earnings of $1.42 billion, an 8.9% increase from the prior year’s quarter. Revenue rose 6.2% year over year to $5.51 billion, but declined sequentially by 3%. The tech giant is obviously not immune to the slowdown in ad spending, but in an economic environment like the one we’re in, these results were quite solid.

Irony of all ironies, both GE and Citi are trading higher in pre-market trading, while Google is trading lower, having given up all its gains from yesterday’s after hours session. But that’s what makes this market so much fun lately, “better than horrible” = “great!” while “solidly profitable” = “yawn.”