With the earnings season only halfway done, it is clear who the big losers are: Merrill Lynch and Citigroup. They have reported over $15 billion in additional writedowns for the quarter. What is increasingly clear is that those who had large exposure to the affected asset classes before the writedowns occurred will continue to have outsized losses compared to their rivals until the credit crisis is over.
Here are Citi’s losses.
A year into the tight credit market, and the losses keep coming. The latest come from Citigroup, which said Friday morning that it lost $2.5 billion, or 0.54 cents a share, in the second quarter.
The loss was largely caused by $7.2 billion of writedowns of Citigroup’s investments in mortgages and other loans and by a weakness in the consumer market, which cost Citigroup $4.4 billion in credit losses and $2.5 billion to increase reserves. Analysts surveyed by Bloomberg News expected on average that the loss would be $3.67 billion.
Given these results, the headline from MarketWatch this morning was interesting.
Stock index futures erased earlier losses, pointing to a higher opening for Wall Street Friday after banking giant Citigroup reported a smaller-than-expected second-quarter loss, offsetting disappointment in earnings from financial-services rival Merrill Lynch and tech giants Google and Microsoft.
–MarketWatch, 18 Jul 2008