Citigroup (NYSE: C) reported quarterly earnings on Tuesday that beat expectations. The big bank also reported a charge of roughly $19 billion following a revamp to the U.S. tax code.
The bank reported adjusted earnings per share of $1.28 for the fourth quarter of 2017. Analysts polled expected earnings to come in at $1.19. Revenue came in roughly in line with expectations at $17.255 billion.
Citigroup also took at one-time, non-cash charge of about $22 billion for the quarter. The company said that approximately $19 billion are due to "re-measurement of DTA arising from reduction in the U.S. corporate tax rate and shift to territorial tax regime."
Citi CEO Michael Corbat said, “While our fourth-quarter results reflected the impact of a significant non-cash charge due to tax reform, the impact on our regulatory capital was much less significant. Tax reform does not change our capital return goals as we remain committed to returning at least $60 billion of capital in the current and next two CCAR cycles, subject to regulatory approval.
“Tax reform not only leads to higher net income and increased returns, but also serves to strengthen our capital generation capabilities going forward.”
Last month, President Trump signed a bill that slashed the corporate tax rate to 21% from 35%. While the new law is expected to be a long-term positive for most companies, several announced they would have to take one-time charges stemming from the changes.
Shares in Citigroup rocketed $1.10, or 1.4%, to $77.94 early Tuesday morning.
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