I’m sure this is much more a function of the unholy mess that is Citigroup’s income statement—many a journalistic braincell was no doubt destroyed yesterday trying to figure whether the bank actually turned a profit—but two leading financial outlets say different things about how well Citi’s trading operations did.

The Journal:

Especially surprising was Citigroup’s weak showing in fixed-income trading, an area that this week propelled J.P. Morgan Chase & Co. and Goldman Sachs to expectation-beating results. Excluding some accounting-related losses, Citigroup’s fixed-income revenue fell 18% from the second quarter to $4.7 billion.

Citigroup Chief Financial Officer John Gerspach told reporters Thursday that the decline reflected “diminished trading opportunities.” He wouldn’t elaborate.

A person familiar with the matter said the lackluster performance wasn’t due to a single bad bet as much as “a collection of immaterial items that in the aggregate were material.” The person said the transactions in question were executed on behalf of clients and weren’t trades for Citigroup’s own account.

NYT:

After pulling off two consecutive quarterly profits, Citigroup slipped to a loss of $3.2 billion in the third quarter as spiraling consumer losses overwhelmed its strong trading results

The results came on the coattails of its trading operations, which cranked out good results from its bond and currency businesses. Still, its credit card and mortgage units are losing money, contributing to about $9.4 billion in consumer losses….

I suppose there’s some wiggle room there—the WSJ mentions fixed-income only; the NYT mentions bonds and currencies—but bonds and fixed-income are the same thing, and it was that area that propelled other megabanks, Goldman and JP Morgan Chase, to big third quarters. The Journal backs up its take by accurately reporting that fixed-income revenue was down. So, if you are trying to figure out what to do with your Citi shares, I’d go with the Journal.

The Citi earnings release is here; abandon all hope all ye who enter there.

(Meanwhile, Bank of America is out this morning with a big loss due, an early Journal story says, to consumer and retail problems, while the new Merrill Lynch segment did well.)

But again, even figuring out if the U.S. taxpayers’ biggest-too-big failure earned a profit is no easy trick.

The WSJ leads with talk of a small profit.

Muted Cheer as Citi Posts Profit



Citigroup Inc.’s struggles continued in the third quarter, with its core businesses stagnating even as some rivals show signs of rebounding.

Citigroup eked out a $101 million profit in the quarter on revenue of about $20.4 billion. Citigroup Chief Executive Vikram Pandit noted that the company has now strung together three straight quarterly profits, an achievement that validates the company’s underlying strength.

The Times stresses the loss:

After pulling off two consecutive quarterly profits, Citigroup slipped to a loss of $3.2 billion in the third quarter as spiraling consumer losses overwhelmed its strong trading results.

Nothing wrong with the different approaches here. Most of the difference comes from an unusual debt exchange with the government, which is posted below net income, a bottom line below the bottom line, and accounts for more than $3 billion. Both accounts are downbeat about Citi, which is the way to be.

The Times adds to confusion later, though, by referring to net income as “continuing operations.”

All the while, he [that would be Pandit, natch] is trying to find a way to repay part of the $45 billion in federal aid and get out from under the government’s thumb. That has made it crucial for the bank to show investors it had a gain in the quarter, no matter how it eked it out — hence, stressing the $101 million in income from continuing operations.

Actually, the income statement lists a different number for continuing operations. It’s not the net. Even if the Times is using the phrase colloquially, Citi earnings are confusing enough.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.