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Citigroup Earnings Plunge 60% on Subprime Woes

Company will be latest victim of market turmoil when it reports

By Kevin Spak,  Newser Staff

Posted Oct 1, 2007 10:53 AM CDT
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(Newser) – Citigroup is the latest big-name victim of the subprime crash, the company announced today, warning of a 60% third-quarter earnings drop. Full earnings will be out Oct. 15, but it appears net income will drop to $2.2 billion from the $5.51 billion reported last year. “Our expected third-quarter results are a clear disappointment,” said CEO Charles Prince.

Even before the announcement, Prince was under pressure because of Citi’s stagnant share price, which fell 1% in early trading on the news. The group joins a host of financials who made losing bets on subprime-related investments. Prince promised a return to normalcy next quarter, which the Times says is when investors will learn the real extent of subprime’s ravages.

The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. said Friday, July 20, 2007 its second-quarter profit rose 18 percent as strong overseas operations helped the biggest U.S. bank pull in record revenues. (AP Photo/Mark Lennihan, file)
The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. said Friday, July 20, 2007 its second-quarter profit rose 18 percent as strong overseas operations...   (Associated Press)
A pair of patrons enter a Citibank branch in Boston, Monday, April 16, 2007. First-quarter profit at Citigroup Inc. dropped 11 percent, but still came in better then expected, as the nation's largest financial institution took a charge to cover a massive restructuring designed to cut costs and improve earnings....
A pair of patrons enter a Citibank branch in Boston, Monday, April 16, 2007. First-quarter profit at Citigroup Inc. dropped 11 percent, but still came in better then expected, as the nation's largest...   (Associated Press)
Japanese businessmen walk past a huge signboard of Citibank in Tokyo, Tuesday, March 20, 2007. In a sign of new openness in the world's second-largest economy, merger mania has gripped the nation and homegrown firms are now the hunted as well as the hunters. The 2,775 M&A deals in...
Japanese businessmen walk past a huge signboard of Citibank in Tokyo, Tuesday, March 20, 2007. In a sign of new openness in the world's second-largest economy, merger mania has gripped the nation and...   (Associated Press)
In this photo released by China's Xinhua news agency, a Chinese customer, left, consults about Chinese Yuan service with an employee at a branch of Citibank in Shanghai, China, Monday, April 23, 2007. Citigroup, HSBC and two other foreign banks on Monday officially began offering local currency retail banking services...
In this photo released by China's Xinhua news agency, a Chinese customer, left, consults about Chinese Yuan service with an employee at a branch of Citibank in Shanghai, China, Monday, April 23, 2007....   (Associated Press)
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