Citigroup posts best Q3 revenue in a decade and a 40% profit jump, but shares slide 5.6%

C reported third-quarter net income of $5.25 billion, or $2.85 per share, up from $3.8 billion, or $1.86 per share, a year earlier. Revenue rose 8% to $23.85 billion, which CEO Jane Fraser called the best third-quarter revenue in a decade. Earnings per share beat the $2.65 consensus cited by MarketBeat and Yahoo Finance, and LSEG's $2.66 estimate.

The growth came mostly from fee businesses. Services and Wealth revenue each rose 15%, and investment banking revenue climbed 9% to $1.35 billion. Markets revenue grew 6% to $6.11 billion, with equities trading up 14% and fixed income up 4%. Citi returned $4.1 billion to shareholders through buybacks and dividends, posted an 11.5% return on tangible common equity, and kept its CET1 capital ratio at 12.8%.

The headline profit jump needs context. The year-ago quarter carried a $726 million goodwill impairment, and excluding it, prior-year earnings were $2.24 per share, according to Citi's earnings release, so underlying per-share growth was closer to 27%. Net income also fell 10% from the second quarter, trading profits dropped 27% from the prior quarter, and profit from credit cards fell 8% from a year earlier.

The stock opened at $131.87 and edged higher on the release, then reversed as the session went on, closing down about 5.6% at $124.53 according to SentiSense market data. The selloff suggests investors weighed the sequential slowdown in trading and cards more heavily than the year-over-year beat. Next to watch: whether Services and Wealth can keep offsetting softer trading, and progress on the planned Banamex listing, which Citi expects next year.