Citigroup lost money and General Electric's profits fell, but both beat Wall Street's expectations. Their financial performance is being closely dissected for signposts of where the economy might be heading.
Citigroup reported its smallest loss since 2007. The financial services company posted a first-quarter loss to common shareholders of $966 million after massive loan losses and dividends to preferred stockholders. However, before paying those dividends, which were tied to the government's $45 billion investment in Citigroup, the bank earned $1.6 billion.
GE said its first-quarter earnings fell 36 percent on sharply lower profits at its troubled finance arm. GE, which has a stake in almost every sector of the economy, from light bulbs to locomotives, posted net income of $2.74 billion, or 26 cents per share, after paying preferred dividends. That was down from $4.30 billion, or 43 cents per share, a year earlier.
Wall Street struggled to find direction as investors digested the corporate icons' reports. Stocks fluctuated in the early going, making modest moves as investors were relieved the reports weren't worse, but were mindful that weakness still pervades financial companies.
In midday trading, the Dow Jones industrial average fell about 15 points and broader indices also slipped.
Citigroup's revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though — at $10 billion — due to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. But in March, Chief Executive Vikram Pandit triggered a stock market rally after he said that January and February had been profitable.
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