XLF, Banking and Financial Sector Stocks: Citigroup Blows out numbers - Yipee!

» Kirk - Citigroup Blows out numbers - Yipee!

NEW YORK, Jan 18 (Reuters) - Citigroup Inc. (NYSE:C - news), the nation's No. 1 financial services company, said on Tuesday its fourth-quarter net profits topped Wall Street expectations by rising 287 percent to $2.62 billion, powered by investment banking, trading and an uptick in its global consumer banking operation.

Full year net income rose to $9.87 billion, a 70 percent increase from $5.80 billion in 1998.

Core earnings in the fourth quarter jumped 86 percent to $2.61 billion from $1.40 billion while full year core earnings gained 57 percent to $9.95 billion from $6.34 billion.

Citigroup earned 75 cents a share net in the quarter, up from 19 cents in the 1998 fourth quarter, when unprecedented economic turmoil in emerging markets battered results.

Core earnings per share for the quarter were 75 cents a share as well, versus 40 cents a share in the prior year's quarter.

Wall Street had expected the company to earn 70 cents a share in the quarter, according to tracking service First Call/Thomson Financial.

``Each of our businesses reinforced its leadership during the year, creating a strong foundation for future profit growth,'' John S. Reed and Sanford I. Weill, Chairmen and Co-Chief Executive Officers of Citigroup, said in a statement.

Surging U.S. stock markets, on the back of the country's historic nine-year economic expansion, an insatiable appetite among investors for new stock offerings, and a worldwide boom in merger deals have bolstered securities businesses at big banks, as well as the major Wall Street houses.

Citigroup's consumer business, which includes credit cards and personal insurance, earned a record $1.17 billion in the fourth quarter, compared with $872 million a year earlier.

Its Salomon Smith Barney securities operation saw profits jump to $664 million from just $13 million in the fourth quarter last year. Its year-ago profits were battered by bond trading losses and poor investment banking results.

``Collaborative efforts among our operations are resulting in new ways to serve customer needs and creating powerful opportunities for our businesses,'' the Citigroup chiefs said.

They added that with revenues twice the level of expenses, the company's efficiency efforts are ``magnifying the impact of revenue gains on the bottom line.''

-- posted by Kirk