Stocks Fall After GE, Citigroup Earnings

123jump.com Staff
17 Apr, 2009
New York City

Investors in the morning appear to be undecided or on sidelines after General Electric and Citigroup reported their earnings. Stocks traded lower in the morning. Revenues in the quarter surged 99% to $24.8 billion on a smaller write down in mortgage securities of $2.3 billion.

[R]12:10PM New York – U.S. stocks dropped in the morning after the earning release from General Electric and Citigroup.[/R]

Investors in the morning appear to be undecided or on sidelines after General Electric and Citigroup reported their earnings. Stocks traded lower in the morning.

General Electric ((GE)) reported first quarter earnings from continuing operations declined 35% to $2.8 billion and earnings per share plunged 40% to 26 cents. Revenues declined 9% to $38.4 billion and industrial segment revenues decreased 9% and financial segment revenues declined 20%.

The results in the current quarter do not include the impact of mark-to-market accounting which will be counted in the second quarter results.

The first quarter earnings were the smallest in the last thirty quarters reported since the first quarter of 2002 when GE reported earnings of 25 cents a share.

Citigroup reported net income of $1.6 billion in the first quarter 2009 on accounting adjustments related to derivative positions. The battered bank reported its first gain after five quarterly losses totaling of $37 billion and three government bailouts that included $45 billion of infusion and conversion of $25 billion of preferred shares to common shares.

When measured its earnings on standard GAAP the bank reported loss of 18 cents a share, sixth quarterly loss in a row and smallest among a string of losses on charges related to conversion discount for a convertible bond offering in 2008.

Revenues in the quarter surged 99% to $24.8 billion on a smaller write down in mortgage securities of $2.3 billion. Earnings per share for the bank were a loss of 18 cents after taking into the account of 24 cents a share or $1.3 billion related to resetting of conversion of preferred stock of $12.5 billion issued in 2008.

The Citigroup ((C)) declined as much as 12% before recovering to $3.82 or a fall of 19 cents or 4.7%. Investors were unnerved after the chief executive suggested uncertain outlook for the bonds held by Citigroup.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 152.32 or 1.74% to 8,907.58, Hang Seng index in Hong Kong increased 18.28 or 0.12% closed to 15,601.27, CSI 300 index in China lower 36.42 or 1.36% closed to 2,650.69. ASX 200 index in Australia increased 1.00 or 0.03% closed to 3,776.70. The KL Composite index in Malaysia higher 3.89 or 0.40% closed to 965.17.

The Kospi Index in South Korea decreased 7.72 or 0.58% to close at 1,329.00. SET index in Thailand closed higher 3.83 or 0.85% to 456.80 and JSE Index in Indonesia increased 9.70 or 0.60% closed to 1,634.79. The Sensex index in India increased 75.69 or 0.69% closed to 11,023.09.

Europe Markets Review

In London FTSE 100 Index closed higher 39.82 or 0.98% to 4,092.80, in Paris CAC 40 Index increased 53.78 or 1.77% to close at 3,091.96 and in Frankfurt DAX index higher 67.38 or 1.46% to close at 4,676.84. In Zurich trading SMI increased 28.68 or 0.56% to close at 5,192.63.