Citi and BofA Drop Earnings Bombs; All's Silent in Bear's De

by Derek Loosvelt | April 21, 2008

The bad news kept coming the past few days, as the country's largest banks continued to release disappointing first quarter earnings. Last Friday, Citi announced that it lost $5.1 billion during the quarter, compared with the $5 billion profit it booked for the first quarter of 2007. Citi also said it would cut an addition 9,000 jobs throughout 2008, mostly due to the shaky subprime market. The reductions came on top of the 4,200 cuts the firm announced in late 2007.

Following suit, Bank of America dropped an earnings bomb today, announcing that its first quarter net income plummeted to $1.21 billion versus the $5.26 billion in profits it booked for the 2007 first quarter. This was even lower than analysts had expected, sending BofA's stock down a couple of percentage points and taking the U.S. stock market down with it, in what was the first decline in the market in five days (Bloomberg provides a good round-up of recent earnings releases and their affects on the market here).

Not to be outdone by its fellow firms that can actually report their own earnings (or, rather, losses), Bear Stearns has stayed atop headlines. This past weekend, The New York Times ran a piece about the firm's rescinded offers (which In the Black has recently reported on), quoting some of the unlucky students now forced to look for another job, as well as some of the lucky ones allowed to hold on to their offers.

Some of the unlucky ones acknowledged that they "probably can't get as good of jobs" now, but don't hold a grudge against toward Bear Stearns or JPMorgan. They also told the Times they felt for older Bear insiders whose wealth was tied up in now-nearly-worthless Bear stock. And one former intern on the receiving end of a rescinded offer recently visited the firm’s New York headquarters last Friday to see old friends, but instead was greeted with silence. "It was a very eerie environment," she said. "No one was working; everyone was gone."

Filed Under: Finance


Credit Suisse Cuts Another 500 Swag

Vault welcomes your views. Please stay on topic and be respectful of other readers. Review our User Guidelines.

blog comments powered by Disqus

Featured Companies

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers