Citi Earnings Bloodbath: $3.8 Billion ($1.23/Share) In Reported "Earnings" Really $0.5 Billion Or $0.16/Share @zerohedge

Citi Earnings Bloodbath: $3.8 Billion ($1.23/Share) In Reported "Earnings" Really $0.5 Billion Or $0.16/Share Submitted by Tyler Durden on 10/17/2011 08:12 -0400 zerohedge (@zerohedge) CDS Another stunning EPS beat from Citi today which reported $20.8 billion in revenue and $1.23 in earnings on expectations of $19.23 billion in top line and $0.82 in EPS.... Until one actually reads the following two parts from theearnings release: 'Third quarter revenues included $1.9 billion of credit valuation adjustment (CVA) reflecting the widening of Citi's credit spreads during the third quarter....Loan Loss Reserve Release of $1.4 Billion in Third Quarter, Down from $2.0 Billion in Each of Second Quarter 2011 and Third Quarter 2010." Once again, the bank releases reserves (i.e. a perceived improvement in economic conditions), even as its take a benefit for major economic deterioration (the equivalent of buying bank its debt at lower prices due to risk flaring). Either way, this is non-recurring gibberish. You take the $3.77 billion in Net Income, take out $1.9 billion and $1.9 billion in "buying CDS on yourself", and the $1.4 billion in phantom EPS loss reserve, and end up with $0.5 billion or $0.16 per share. It will take the vacuum tubes about an hour to figure this out.  zerohedge.com/node/439227

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