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Citi (C) Revises Q4 Earnings Downward Due to Revlon Case Impact
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Citigroup (C - Free Report) has revised fourth-quarter 2020 earnings, reported on Jan 15, 2021, downward. This was due to a $390 million increase in operating expenses recorded within its institutional clients group segment, resulting from operational losses related to certain legal matters.
The downward adjustment lowered Citi’s quarterly net income from $4.6 billion to $4.3 billion and earnings per share from $2.08 to $1.92. This compared unfavorably with net income of $5 billion, or $2.15 per share in the fourth quarter of 2019.
The adjustment is related to Citi’s involvement in $894 million accidental wire transfer to several lenders of the cosmetics brand Revlon, Inc. . So far, the bank has been able to recover only $389.8 million.
In its annual filing, the bank said that human error at its end and at a third-party vendor, and limitations in Citi’s loan processing systems were the main reasons behind this error.
In mid-February, the court issued a judgment against Citi, which it intends to appeal. Jesse Furman, a U.S. district judge in Manhattan, reasoned that had the bank “realized its error and notified the lenders within one day”, ruling might have been in its favor. As a result of the court’s decision, Citi now has rights as a creditor related to the loan.
Citi continues to encounter many investigations and lawsuits from investors and regulators. As the company is making efforts to work through its legacy legal issues, we believe that it might continue witnessing elevated legal expenses and litigation provisions, which are likely to hurt its financials.
Shares of the company have gained 26.8% over the past six months compared with 38.3% growth recorded by the industry.
Comerica Incorporated (CMA - Free Report) has witnessed 18.7% upward estimate revision over the past 30 days. The company’s shares have gained 69.5% over the past six months. It flaunts a Zacks Rank #1 at present.
M&T Bank Corporation’s (MTB - Free Report) shares have gained 45% over the past six months. Further, the company’s earnings estimates for the ongoing year have moved 13.5% north in the past 30 days. It currently sports a Zacks Rank of 2 (Buy).
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
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Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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Citi (C) Revises Q4 Earnings Downward Due to Revlon Case Impact
Citigroup (C - Free Report) has revised fourth-quarter 2020 earnings, reported on Jan 15, 2021, downward. This was due to a $390 million increase in operating expenses recorded within its institutional clients group segment, resulting from operational losses related to certain legal matters.
The downward adjustment lowered Citi’s quarterly net income from $4.6 billion to $4.3 billion and earnings per share from $2.08 to $1.92. This compared unfavorably with net income of $5 billion, or $2.15 per share in the fourth quarter of 2019.
The adjustment is related to Citi’s involvement in $894 million accidental wire transfer to several lenders of the cosmetics brand Revlon, Inc. . So far, the bank has been able to recover only $389.8 million.
In its annual filing, the bank said that human error at its end and at a third-party vendor, and limitations in Citi’s loan processing systems were the main reasons behind this error.
In mid-February, the court issued a judgment against Citi, which it intends to appeal. Jesse Furman, a U.S. district judge in Manhattan, reasoned that had the bank “realized its error and notified the lenders within one day”, ruling might have been in its favor. As a result of the court’s decision, Citi now has rights as a creditor related to the loan.
Citi continues to encounter many investigations and lawsuits from investors and regulators. As the company is making efforts to work through its legacy legal issues, we believe that it might continue witnessing elevated legal expenses and litigation provisions, which are likely to hurt its financials.
Shares of the company have gained 26.8% over the past six months compared with 38.3% growth recorded by the industry.
Citi currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Comerica Incorporated (CMA - Free Report) has witnessed 18.7% upward estimate revision over the past 30 days. The company’s shares have gained 69.5% over the past six months. It flaunts a Zacks Rank #1 at present.
M&T Bank Corporation’s (MTB - Free Report) shares have gained 45% over the past six months. Further, the company’s earnings estimates for the ongoing year have moved 13.5% north in the past 30 days. It currently sports a Zacks Rank of 2 (Buy).
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>