Following its emergence from bankruptcy protection in Dec 2009, CIT Group Inc. (CIT) said in a regulatory filing with the Securities and Exchange Commission (SEC) on Monday that it expects to report a loss of about $900 million in the fourth quarter and about $4 billion for 2009.
However, the expected fourth quarter and full year numbers exclude the effect of CIT’s massive Chapter 11 reorganization. According to CIT, the full year loss of $4 billion would be offset by the cancellation of debts.
In 2008, CIT lost $2.9 billion, including a $2.2 billion loss on the sale of its home lending business and a $468 million charge for goodwill and asset writedowns.
Initially, CIT was expected to issue its results on Monday but said it would be delayed until Mar 16 as the company didn’t have enough time since emerging from bankruptcy.
Over the last 30 days, only one analyst covering the stock has lowered his estimate for the fourth quarter of 2009. Currently, the Zacks Consensus Estimate for the fourth quarter is a loss of $9.05 per share.
The absence of upward estimate revisions for the first quarter indicates a likelihood of downward pressure on the performance of the stock in the near term.
Based in New York, CIT is one of the largest diversified specialty lenders focusing predominantly on secured commercial lending and leasing, the major portion of the financial system that collapsed during the height of the financial crisis last year.
The U.S. government extended a support of $2.3 billion to CIT in Dec 2008 through the Troubled Asset Relief Program (TARP). We think it would difficult for CIT to repay the government money in the near term.
Read the full analyst report on “CIT”
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