Citi to separate out financials.
By Daniel at 10 July, 2009, 10:44 pm
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Citi just announced that they will report in three segements; Citi*corp* (core assets), Citi*group* (non-core) and corporate.
Mr. Pandit says the long-term goal is to go back to core businesses and divest non-core businesses. Last quarter the Citi*corp* segment profit was $7.69 billion while the Citi*group* segment loss was $5.32 billion.
Obviously the message is that Mr. Pandit wants investors to focus on the $7.69 billion profit (which annualized and increased by the reduction in preferred dividends would be about $1.50/year in earnings per post-conversion share) while the $5.32 billion-type losses are supposed to go away in the future. Certainly good if that happens. At least there’s a goal.
On the other side, we still have the upcoming conversion which will multiply the common outstanding by four. No doubt many holders of the preferred like preferred and not common and will sell. I’m sure that concept has been pressuring the stock for the few months since announced. We’ll see if it alleviates after the conversion. That’s a lot of shares.
My philosophy is to look at fundamentals–if the outlook is good then the shares will be worth it regardless of all these other pressures. If not then not. We’ll see Friday morning.
prophet
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