CIT Misses Expectations Amid Restructuring Costs
February 02 2016 - 8:20AM
Dow Jones News
CIT Group Inc. said profit declined in its fourth quarter as
expenses stemming from acquisitions and divestitures offset higher
revenue.
The Livingston, N.J.-based bank, which operates in 12 states
plus the District of Columbia, lends to the small business, middle
market and transportation sectors. Focused on commercial banking,
CIT last year bought OneWest Bank, sold some international assets
and is pursuing a sale or spin off its commercial air business.
Those moves took $76 million, or 38 cents, off the lender's bottom
line.
Earlier this week, The Wall Street Journal reported that
activist hedge fund Hudson Executive Capital LP, a new fund
launched by two former J.P. Morgan Chase & Co. deal makers, has
taken a stake in CIT Group Inc. and is also pushing for sales of
its rail business and lending operations.
"CIT's evolution to a commercial bank model progressed
throughout 2015," said Chief Executive John Thain, who is retiring
next month.
Noninterest income, which for CIT mainly comes from rent charged
on operating leases, slid 12% in the latest quarter. Though income
from operating leases edged higher, it was offset by a loss
resulting from the sale of a platform in Brazil.
Overall, CIT reported a profit of $144.5 million, or 72 cents a
share, down from $251 million, or $1.37 a share, a year earlier.
Excluding restructuring related charges, among others, profit
declined to 75 cents a share from $1.37.
Revenue increased 14% to $558.6 million. Analysts predicted 83
cents in adjusted per-share earnings on $600.6 million in revenue,
according to Thomson Reuters.
Total operating expenses jumped to $358 million from $249
million a year earlier.
Shares in the bank, down 33% over the past three months, were
inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 02, 2016 08:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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