Moving right along, Citigroup posted a record $4.28 billion in profits! Who needs government help with profits like that? Well, the results were distorted with a little help from a $6.7 billion gain related to the combination of its Smith Barney brokerage operations with those of Morgan Stanley. Conveniently, Citigroup didn't provide results excluding the gain, so I'll have to do my own math. By my calculations $4.28 billion minus $6.7 billions equals a loss of around $2.4 billion. Now this is probably not the right way to do the calculation, but you know, I don't think it would be inappropriate for the damn company to break out its operating results so that analysts and investors can see what the real story is. Particularly when you're on government life support and everyone and their mother is trying to figure out if you're going to survive another quarter.
Meanwhile, GE, that finance company that calls itself an industrial bellwether, reported a 47% drop in second-quarter earnings Friday. GE posted income of $2.67 billion or 24 cents a share, down from $5.07 billion or 51 cents a share a year earlier. Revenue fell 17% to $39.08 billion amid a 29% drop at GE Capital. Analysts expected earnings of 23 cents on revenue of $42.16 billion so I'll call these results worse than expected. GE Capital's profits plummeted 80%, but really the only reason GE Capital is even posting profits is that it isn't required to mark its assets to market. More details on the performance of its loan portfolio will be extremely enlightening. Although the energy-infrastructure business only had a 1% drop in revenue, the consumer and industrial operations saw revenues and profits drop 20%.
GE's stock is down around 4% and seems to be the biggest disappointment to investors. Yesterday's lackluster results from Google, 5% revenue growth for a company that is used to 30% or more, is also weighing on the market. IBM's respectable quarter, a 12% jump in second-quarter profit on a 13% decline in revenues coupled with raised guidance for the forthcoming year, hasn't done much to propel the market higher. If you were hoping for an exciting expiration Friday, you will likely be sorely disappointed.
1 comment:
Come on K10 you're too harsh. Citi only lost $2.4 billion. Why, GS alone gave $6.65 billion in just bonuses to their employees. $2.4 billion is just peanuts in this day and age.
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