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
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)
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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.