Earnings: Citigroup | Mattel

Citigroup Posts Rise In Profit

NEW YORK — (AP) — Citigroup Inc. (C), the nation's largest financial institution, on Monday said its second-quarter profit rose 4 percent as corporate and investment banking revenue improved, but the results were slightly below analysts' projections.

Profit in its consumer banking division continued to be dampened by narrow net interest margins, or the spread between the rate banks pay to borrow money and the rate they can charge on their loans. Margins have been squeezed as the Federal Reserve has raised short-term interest rates while long-term rates have been relatively flat.

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The New York-based bank said net income was $5.27 billion, or $1.05 per share, up from $5.07 billion, or 97 cents a share, a year earlier.

Revenue was up 10 percent at $22.18 billion for the quarter from $20.17 billion in the second quarter of 2005.

Analysts surveyed by Thomson Financial had projected second-quarter earnings of $1.06 per share on revenue of $22.6 billion.

Corporate and investment banking revenue surged 31 percent to $6.76 billion in the second quarter from $5.16 billion a year earlier, and revenue from global wealth management rose 19 percent to $2.5 billion from $2.1 billion in 2005. Revenue in the global consumer division, meanwhile, was up 5 percent to $12.6 billion from $12 billion a year earlier.

Growth in the global consumer division was especially strong overseas, where revenue rose 12 percent to $5.07 billion from $4.54 billion a year earlier. Domestically, revenue was $7.57 billion, up 1 percent from $7.5 billion a year earlier.

Citigroup chairman and chief executive, Charles Prince, said in a statement accompanying the report, that the U.S. growth came "despite headwinds from spread compression" and was better than first-quarter performance.

He added that "in corporate and investment banking, we achieve our second highest revenues, despite challenging conditions in the emerging markets."

Prince said Citigroup opened "a record number of new consumer branches" in the second quarter, bringing the year-to-date total to 508.

Revenue dropped in the bank's alternative investments category and miscellaneous corporate.

Net income for the first six months of the year totaled $10.9 billion, or $2.17 a share, up from $10.5 billion, or $2.01 a share, in the first six months of 2005.

Citigroup has some 200 million customers worldwide operates in 100 countries.

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Mattel Beats Views

NEW YORK (Reuters) - Mattel Inc. (MAT), the No. 1 U.S. toy maker, Monday reported a higher-than-expected quarterly profit, helped by strong sales of its summer movie-based toys.

The company, known for its Barbie dolls and Hot Wheels cars, reported second-quarter net income of $37.4 million, or 10 cents per share, compared with a year-earlier loss of $94 million, or 23 cents per share.

The results included a tax benefit in the latest quarter and tax expenses in the year-earlier period.

Excluding those items, earnings rose to 8 cents per share from 5 cents. Analysts on average had been expecting 4 cents, according to Reuters Estimates.

Revenue rose 8 percent to $957.7 million, surpassing analysts' expectations of $922.95 million. Worldwide gross sales in the company's entertainment business jumped 38 percent, primarily due to the launch of the "Cars" and "Superman" toy lines.

Gross worldwide sales of Barbie, a brand Mattel has been trying to bolster amid stiff competition from privately held MGA Entertainment's Bratz dolls, fell 1 percent.

However, U.S. Barbie sales rose, their second consecutive quarterly increase.

"While I am pleased with Barbie's progress thus far, we are still in the process of implementing a variety of enhancements for the brand over the next year," Chief Executive Robert Eckert said in a statement.

Mattel has put a new management team in place to try to reinvigorate Barbie sales. While the company said it had made "tweaks" to the brand for 2006, more extensive changes will not come until 2007.

Worldwide gross sales fell 6 percent for Mattel's toy car and vehicle category, which includes the Hot Wheels brands, and dipped 1 percent for its "other" girls brands, which includes Pixel Chix and Polly Pocket.

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