|
Financial firms mixed
|
 |
July 19, 2000: 1:30 p.m. ET
Citigroup tops forecast, sets split; Chase beats Street, Bank One loses
|
NEW YORK (CNNfn) - Citicorp and Chase Manhattan Corp. beat Wall Street estimates with their second-quarter earnings Wednesday, but Bank One bit the bullet and posted a big loss.
Citigroup led the way, posting record profits, while Chase beat Wall Street forecasts but earned less than a year ago. Bank One bucked the trend, posting a $1.27 billion loss due to a multitude of one-time charges.
Citigroup Inc. (C: Research, Estimates)  the biggest U.S. financial services company, reported second-quarter income of $3.01 billion, or 87 cents a share, up from $2.45 billion, or 71 cents, a year earlier. The figure topped the 83-cent-a-share consensus of analysts surveyed by First Call. Second-quarter revenue rose 10 percent to $16.4 billion from $15 billion.
The company also announced a four-for-three stock split, payable August 25 to shareholders of record Aug. 7, and raised its dividend 17 percent to a post-split 14 cents a share.
Citigroup cited strength in its consumer and investment banking operations for the notable boost to its bottom line. It also disclosed an agreement Tuesday with America Online Inc. (AOL: Research, Estimates) allowing the financial services company to broaden product access to consumers.
Citigroup reaches a record
For the first six months of 2000, Citigroup reported record earnings of $6.6 billion, or $1.91 per share, up from $4.81 billion, or $1.40 a share, a year earlier.
"We have invested substantially this quarter in acquisitions and partnerships that meaningfully expand our global businesses," Chairman and CEO Sanford I. Weill said. "We not only completed the acquisition of Schroders, but we made tremendous headway in the integration of that business and the resulting organization, Schroder Salomon Smith Barney, has quickly become a leading investment and corporate banking force throughout Europe."
Citibank wasn't alone in releasing second-quarter results that exceeded forecasts. Chase Manhattan Corp. (CMB: Research, Estimates), the No. 3 U.S. bank holding company, Wednesday reported second-quarter earnings excluding one-time items well above Wall Street's consensus forecasts though still about 22 percent below year-ago results.
The New York-based banking company, which has nearly $400 billion in assets, also said it named ousted BankAmerica Corp. chief David Coulter as its vice chairman. The appointment of Coulter, who most recently was a partner at Beacon Group, an investment banking boutique, signals the growing importance of the deal-making business to Chase.
Chase beats the Street
Chase earned $1.09 billion in the quarter, or 85 cents a share, after one-time items, down from $1.39 billion, or $1.06 a share, in the year-ago quarter. Excluding the one-time items such as restructuring charges and credit card securitizations, Chase earned $1.22 billion, or 95 cents a share, compared with $1.35 billion, or $1.03 a share, a year ago.
 Wall Street analysts on average had expected Chase to earn 83 cents a share in the quarter, according to First Call.
Operating revenue for Chase Manhattan Bank remained relatively flat, growing only 2 percent to $5.2 billion. Net income, which includes nonrecurring items, fell 22 percent to $1.1 billion, or 85 cents a share, from $1.4 billion, or $1.06 a share, a year earlier.
Revenue from trading activity helped bolster Chase's quarterly performance. Total trading revenue grew 15 percent to $841 million, driven by foreign exchange and equity trading. Fees from investment banking rose 9 percent to $639 million. Chase Chairman and CEO William Harrison also cited the company's international strength for its better-than-expected performance.
"And with the acquisition of the Beacon Group on July 6 and the anticipated acquisition of Flemings on Aug. 1, we are strengthening Chase's ability to benefit from the growth occurring in the global securities markets."
Bank One posts loss
Offsetting the feel-good announcements was Bank One Corp. (ONE: Research, Estimates), which Wednesday posted a second-quarter loss of $1.27 billion, or $1.11 per share, after a long-awaited $1.91 billion after-tax charge. It also slashed its dividend as it tries to recover from problems at its credit card unit that have more than halved its stock price in the past year.
The loss contrasted with a profit of $992 million, or 83 cents a share, a year earlier. Excluding special items, Bank One's earnings were about 55 cents a share. The consensus estimate among Wall Street analysts was 64 cents, according to First Call.
The charges includes a host of things, including a $777 million pretax write-down at the company's troubled First USA credit card unit and $518 million in pretax write-down and reserve additions in the Chicago-based bank holding company's retail division.
Bank One also said its board of directors decided to cut the company's common stock dividend in half to 21 cents a share. The reduced dividend is payable Oct. 1 to shareholders of record Sept. 15. Bank One is the fourth-largest bank in the United States.
Shares of Citigroup rose 1-1/16 to 67-3/4 in early afternoon trade Wednesday, while Chase shares slipped 5/16 to 50-5/8. Shares of Bank One rose 2 to 32. 
|
|
|
|
|
|
Citigroup
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
