Citi's Q1 profit slips to $5b on reorganisation costs
Citigroup said on Monday its first-quarter profits fell 11% to $5.01 billion as the banking powerhouse set aside funds for a major belt-tightening plan for its worldwide operations.
By Agencies |
NEW YORK/AMSTERDAM: Citigroup said on Monday its first-quarter profits fell 11% to $5.01 billion as the banking powerhouse set aside funds for a major belt-tightening plan for its worldwide operations.
The earnings amounted to $1.01 per share, or $1.18 excluding one-time costs, against market expectations for $1.09 a share. The results include a previously disclosed charge of $1.38 billion linked to an overhaul that will see 17,000 job losses and a shifting of 9,500 positions to “lower cost locations” while some corporate operations are consolidated.
Citigroup said it generated strong momentum during the quarter, with revenues increasing 15% to a record $25.459 billion, driven by growing customer business volumes. “We achieved these results while completing our structural expense review, which will help us become a leaner, more efficient organisation and lower our rate of expense growth,” said chairman and chief executive Charles Prince.
“As we look ahead, our priorities are clear: we will invest to grow and integrate our businesses, take actions to improve efficiency and lower costs, and continue to build momentum across our franchises.”
Prince said some changes in Citi operations will come from new acquisitions and efforts “in expanding our distribution and enhancing our technology as we build a broad, strong foundation for future growth.” This included acquisition of British-based Egg, described as the world’s largest internet bank, and an offer to buy the scandal-hit Japanese securities firm Nikko Cordial. Global consumer deposits were up 12% during the quarter and global consumer loans grew 11%.
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Philips lights up profits with asset salesDutch electrical equipment maker Philips reported Monday that the sale of microchip assets in Taiwan had helped boost net first-quarter profit by 446% to e875 million ($1.172 billion). The group also said it saw a bright future for its energy-saving light bulbs.
In the first quarter of this year Philips, which is refocusing on making medical equipment, made capital gains of e697 million from the sale of its holding in Taiwan Semiconductor Manufacturing (TSMC). Net profit in the first quarter of last year had been e160 million. The outcome exceeded forecasts by analysts who had expected net profit between e773 to e869 million, according to estimates polled by Thomson Financial. Sales fell by 2.6% to e5.991 billion from e6.155 billion.
The division making lighting equipment reported strong results owing to sales of low-consumption light bulbs. Sales rose by 10% to e1.45 billion. The company said that the lighting division was well placed to benefit from understanding among consumers of the need to reduce the consumption of energy.
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Eli Lilly profit falls on Icos acquisitionEli Lilly, the world’s biggest maker of psychiatric medicines, said its first-quarter profit fell 39% on costs from the purchase of Icos Corp. Net income fell to $509 million, or 47 cents a share, from $835 million, or 77 cents, a year earlier, Lilly said on Monday in a statement on PR Newswire. Excluding charges from acquisitions, licensing, and a plant closing, earnings were 84 cents a share, beating the 79-cent average estimate of analysts.
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