Citi's top line took a big hit. The
company reported revenue of $7.2
billion for the quarter, down 70
percent from $23.8 billion a year
earlier.
The results were far worse than
forecast. Analysts had expected the
company to report a loss of $1 a
share on revenue of $10.64 billion,
according to analysts surveyed by
earnings tracker Thomson Financial.
"It's very clear that Citigroup's
fourth-quarter results are
unacceptable," Citigroup CEO Vikram
Pandit said in a conference call
Tuesday morning.
Pandit, who arrived in office a
little over a month ago, blamed the
company's grim results on subprime
exposure in the company's
fixed-income business, a surge in
credit costs in its U.S. consumer
loan portfolio and the staggering
$18.1 billion writedown.
In November, when Citigroup
announced the departure of former
CEO Charles Prince, the company
warned that it could writedown as
much as $11 billion. Recent reports
had estimated that Citi could
writedown as much as $24 billion
during the quarter.
Also hit hard was the company's
consumer loan portfolio, which
suffered a separate $4.1 billion hit
due to higher credit costs.
Big changes
Citi also announced Tuesday that it
would reduce its quarterly dividend
to 32 cents from 54 cents a share,
making it the latest financial
institution to reduce its dividend
payout.
While cutting the dividend hits
shareholders directly, the move is
expected to save the company more
than $4 billion annually.
Citigroup's Chief Financial Officer
Gary Crittenden defended the
decision, arguing that it made sense
given the uncertainty going forward
and capital needed for future
growth.
"We tried to make a long-term
decision," said Crittenden.
The New York-based bank said it
raised $12.5 billion in capital from
outside investors both domestically
and abroad. Two months ago,
Citigroup sold a stake to the Abu
Dhabi state investment fund in
exchange for a $7.5 billion cash
infusion.
In addition, Citigroup said it would
raise an additional $2 billion
through the public sale of
convertible preferred securities.
"We have taken actions to strengthen
our capital base which will position
us well and allow us to refocus on
earnings growth in the future,"
Pandit said.
Citigroup also said it was
eliminating 4,200 jobs from its
company's 375,000 global workforce.
That's in addition to the 17,000 job
cuts the company announced last
spring.
Pandit said the company would take a
charge in the quarter as a result -
he called it a "down payment" - as
it reviews staffing levels at its
myriad business units.
The company also added that it plans
to sell of some of its non-core
assets, which could include any
number of businesses in the more
than 100 countries where Citigroup
has a foothold. Most recently the
company trimmed its stake in
Brazilian credit card issuer
Redecard SA.
"We are working as hard as we can to
lead with our front foot and capture
opportunities for our shareholders,"
said Pandit.
Citigroup kicks off what will be a
particularly busy week for the
financial sector. Merrill Lynch,
JPMorgan Chase (JPM,
Fortune 500)
and Washington Mutual (WM,
Fortune 500)
are all slated to report quarterly
results this week.
Citigroup's stock endured one of its
worst annual performances on record
last year and was the worst
performing Dow component in 2007.
Its shares finished the year down 47
percent. 
