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Dow ends up nearly 380 on Citigroup profit news
Citigroup Inc. has been operating at a profit through the first two months of the year, according to a letter that the embattled bank's chief executive sent to employees.
In the letter sent Monday, CEO Vikram Pandit said the first-quarter performance so far has been the bank's best since the last time it recorded net income for a full quarter - that was in the July-September period in 2007. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.
Citigroup Inc. (C) is lifting the curtain on the $45 billion in taxpayer capital it received, saying it plans to use $36.5 billion to fund U.S. mortgage loans and assist credit card holders and businesses.
In the first of four quarterly reports, Citigroup said the money it received from the U.S. Treasury’s Troubled Asset Relief Program (TARP) will not fund advertising, marketing, lobbying, compensation and bonuses. Nor will it be used to pay the company’s dividend.
Moody's (News) Investors Service on Friday cut its ratings on Citigroup (News/Aktienkurs) and Standard&Poor's changed the bank's outlook to negative after news the U.S. government will boost its equity stake in the bank to as much as 36 percent.
Citigroup said it too lost money for the fifth straight quarter during the last three months of the year. It also said it would restructure itself, creating a new division called Citi Holdings where its most troubled assets would be housed. It's an attempt to build a wall around the healthy parts of the company to persuade investors not to give up on Citigroup.
I don't think they are pulling a fast one, but simply applying the money which was given into their books.
Peasant Bus Tour of AIG Mansions | WallStreetOasis.com
To celebrate the passage of the Populist Rage Tax, a bus tour has ... angry
peasants through the loop of mansions owned by AIG executives, ...
www.businessinsider.com... ...
www.wallstreetoasis.com...
EBIT should not be used to evaluate a company in isolation. Even though a heavily leveraged company may appear profitable using EBIT, in actuality, it may be losing money when interest on its significant debt load is taken into account. Taxation can also have such a significant effect on the profitibility of a company that a seemingly promising company may be a poor investment choice if only the EBIT is considered.