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Do Citigroup earnings forecast another good year for big banking stocks?

James Dennin, Kapitall: Citigroup profits beat estimates while JP Morgan's disappointed. What does that mean for big banking stocks?

The big banking stocks began reporting earnings last Friday, starting with JP Morgan (JPM), and the news wasn't good at first. 

The world's largest financial institution by net assets declined in profitability this quarter, causing many to worry whether that spelled out bad news for other big names in the sector who report earnings this week. 

Read more from Kapitall: Will Earth Day benefit these 7 environmentally friendly companies?

However, it seems like those concerns might have been overly pessimistic. Today Citigroup (C), the second big bank to report its first quarter earnings, reported profit growth that exceeded analyst expectations. 

That's caused most of the financial stocks on the Dow Jones to get a large bump in price this morning. Bank of America (BAC), Goldman Sachs (GS), and American Express (AXP) are all up at least 1%. Citigroup is up almost 5%, as of 12:25 PM New York Time.

It seems then that many who warned of "regulatory woes" over-estimated the effect of Dodd-Frank on the markets. It's true that Citigroup relied in part on layoffs to turn in an expectation-beating earnings report. But the strong results also came at a time when banks were tasked with re-vamping their trading procedures and dealing with imposed fines. 

Many other big banks will report earnings this week. Good news would augment confidence in the state of the economy; however, bad news could likely erase today's gains. 

Click on the interactive chart to view data over time. 

 Will these big banking stocks overcome new regulations or will they continue to provide unpredictable results? Use the list below to begin your analysis.

1. Bank of America Corporation (BAC): Provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments primarily in the United States and internationally. Market cap at $175.76B, most recent closing price at $16.53.

 

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