Citigroup, GE Post Better-Than-Expected Results Citigroup, which received tens of billions in government bailout funds, reported its smallest quarterly loss in more than a year, while manufacturing giant GE posted a profit.
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Citigroup, GE Post Better-Than-Expected Results

Citigroup Inc., the financial giant that received tens of billions in government bailout funds, reported its smallest quarterly loss in more than a year on Friday — a signal that the U.S. banking sector could be improving.

News of the $966 million first-quarter loss, which was better than most analysts expected, came on the same day that General Electric, which makes everything from light bulbs to jet engines, reported a $2.8 billion profit. That amounted to a 35 percent decline from the same period a year ago, but it beat analysts' forecasts. The company has been weighed down by its GE Capital arm, which took big hits in real estate and credit card businesses.

Citigroup's loss amounted to 18 cents per share and was considerably smaller than the bank's $5.11 billion, or $1.03 per share, loss in the first quarter of 2008. Excluding the payment of preferred dividends, the bank would have posted a profit of $1.6 billion.

Citi recorded revenues of $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though — at $10 billion — owing to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.

CEO Vikram Pandit said he was pleased with the results. Last month, Pandit said Citigroup had done well in the first two months of the year, touching off a sharp market rally.

Separately, Citigroup said Friday it is delaying the government's exchange of billions of dollars' worth of preferred shares into common shares until the government completes its "stress test" of the bank, one of several the government is conducting of financial institutions to gauge the health of U.S. banks. Those results are expected in early May.

Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. Its better-than-expected report follows surprisingly solid earnings from JPMorgan Chase & Co., Goldman Sachs Group Inc. and Wells Fargo & Co. over the past several days.

Citigroup took $45 billion from the federal government's Troubled Asset Relief Program, or TARP, funds. JPMorgan Chase recently said it was ready to repay the $25 billion in TARP money it took last year.

GE reported net income of $2.74 billion, or 26 cents per share, after paying preferred dividends. That fell from $4.30 billion, or 43 cents per share, a year earlier.

The company posted stronger results in divisions that make power plant turbines and jet engines, balancing drops in its entertainment, consumer products and health care operations. But GE Capital, with tendrils in some of the most vulnerable sectors of the economy, is what concerns investors. GE CEO Jeff Immelt said the company still believes it won't have to raise more cash to prop up GE Capital.

Both President Obama and Federal Reserve Chairman Ben Bernanke have spoken of "glimmers of hope" in the economy, while being careful to remind Americans that the recession was far from exhausted.

On Thursday, the Labor Department reported fewer first-time claims for unemployment insurance even as the total number of Americans on state jobless rolls continued to swell. Meanwhile, new home and apartment construction plummeted to its second-lowest pace in five decades of record keeping, the Commerce Department reported.

From NPR staff and wire service reports