Citigroup Shares Plunge on Disappointing Profit

NEW YORK â€”  The difficult interest rate environment in the United States depressed Citigroup Inc.’s fourth-quarter earnings, and investors sent its shares down sharply Friday.

Citigroup, the nation’s largest financial institution, said Friday that its profit rose 30% in the October-to-December period, largely on strength in its international operations and a gain on the sale of its asset-management business. Excluding the sale, however, earnings were below expectations and investors punished the stock.

Citigroup shares fell $2.25, or 4.7%, to $45.69.

The New York company said net income totaled $6.93 billion, or $1.37 a share, in the fourth quarter, up from $5.32 billion, or $1.02, a year earlier.

Excluding the $2.1-billion gain on the sale of its asset-management business to Baltimore-based Legg Mason Inc., net income fell about 3% from a year earlier to $4.97 billion and earnings per share were flat at 98 cents.

Revenue totaled $20.78 billion for the latest quarter, up 3% from $20.1 billion a year earlier.

Wall Street projections were for profit of $1 a share on revenue of $21.6 billion, according to a survey by Thomson Financial.

Citigroup Chief Executive Charles Prince said strength in the bank’s international business was partially offset by “a challenging interest rate environment� that cut into global consumer bank earnings.

Revenue in Citigroup’s global consumer unit, the most sensitive to interest rates, fell 3% to $11.8 billion in the fourth quarter. But revenue rose in corporate and investment banking as well as in global wealth management.

For the year, net income totaled $24.6 billion, or $4.75 a share, up 44% from $17.05 billion, or $3.26 a share, in 2004. Revenue was $83.6 billion, up 5% from $79.6 billion.