Citigroup Called Out For Trying To Spin Weak Q1 Results

Citigroup is catching some grief over its transparent attempt to disguise weak first-quarter earnings.

Investors and analysts usually gauge whether a company had a successful quarter or not by comparing its performance during the same period a year ago. But in its quarterly earnings report released on Monday, Citigroup downplayed its year-earlier performance, and tried to compare its first quarter results to the fourth-quarter of 2010.

The NYT's Dealbook astutely called the bank out for trying to play the spin game, noting that at the top of the press release announcing its results, Citigroup was happy to point out its first quarter net income rose more than 130 percent from the prior quarter. However those results narrowly missed Wall Street's expectations, and Citigroup conceded on the second page of its earnings release that year-over-year profits actually fell 32 percent.

From Dealbook:

But investors and analysts typically look at year-over-year growth, not quarter-over-quarter growth. Finding the exact number required some digging. Although it nods at the profit decline earlier in the announcement, Citigroup disclosed on the second page of its release that it earned $4.4 billion in the same period of 2010 - meaning that profits fell on a year-over-year basis by 32 percent.

The headline number wouldn't be all that notable, except for that it deviates from previous earnings announcement. In both the third and fourth quarter of 2010, Citigroup highlighted the year-over-year comparisons. Of course, they were favorable, with earnings rising over that 12-month period.