) --


(C) - Get Report

was the loser among the largest U.S. financial names on Friday, with shares declining over 2% to close at $36.60.

The broad indexes ended mixed, after the Bureau of Economic Analysis reported that its "advance estimate" showed that the U.S. gross domestic product grew during the third quarter at an annualized pace over the second quarter. This was quite an increase from a "real GDP" growth rate of 1.3% the previous quarter. The Bureau "emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency," and said that its second estimate of third-quarter sequential GDP growth would be released on Nov. 29, and would be "based on more complete data."

While there's no question that the company is an earnings powerhouse, and that its shares do not appear overvalued at 12 times the consensus fiscal 2013 earnings estimate of $50.62, there was some disappointment after


late on Thursday reported earnings of $8.2 billion, or $8.67 a share, for its fiscal fourth quarter ended Sep. 29, which came in below the Zacks consensus estimate of $8.85.

Apple's fiscal fourth-quarter revenue of $36.0 billion was slightly ahead of the consensus estimate of $35.8 billion.

Apple CFO Peter Oppenheimer said the company was "pleased to have generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012," and provided guidance, saying "we expect revenue of about $52 billion and diluted earnings per share of about $11.75," for the company's first quarter of fiscal 2013, which would be a significant increase revenue increase from $46.3 billion in the first quarter of Fiscal 2012, but a 15% decline in earnings EPS from $13.87.

During Apple's earnings conference call, Oppenheimer said he expected the company's gross margin next quarter "to be about 36%, reflecting approximately $90 million related to stock-based compensation expense," and declining from a gross margin of 40% in the most recent quarter, and 44.7% from the first quarter of Fiscal 2012.

The CFO explained that new products represented "over 80% of the total expected December quarter revenue," and that "there are costs associated with such dramatic change and demand."

"All of these products have higher costs than their predecessors," Oppenheimer said, "and therefore lower gross margins, as they are at the height of the cost curve. This has been the case with new products in the past," but "the difference this time is the sheer number of new products we are introducing in a very short period of time."

Writing for

Real Money Pro

, Doug Kass said that although "the company is a sandbagger by nature, the EPS guidance would represent the first year-over-year profit decline in many years."

Kass said that "at issue is whether the gross-margin turndown is a function of the need to produce lower-priced products in order to maintain its growth curve and product demand. Will the next quarter represent the nadir in margins, and will yields improve as the company navigates the cost curve successfully (as it did following the iPhone 4 launch in 2010)?"

Despite the somewhat negative guidance and reaction, Apple's shares declined by only 1%, to close at $604.00.

Turning back to financial names, the

KBW Bank Index


was down % to close at 49.25, with all but three of the 24 index components showing declines.


Citigroup's shares have now returned 39% year-to-date, following a 44% decline during 2011.

The shares trade for 0.7 times their reported Sept. 30 tangible book value of $52.70, and for eight times the consensus 2013 earnings estimate of $4.63 a share, among analysts polled by Thomson Reuters.

There were two major news items for Citigroup on Friday. The first was a

bombshell report

from the New York Times, saying that despite former Citi CEO Vikram Pandit's claim that his

abrupt resignation

on Oct. 16 was solely his decision, Citigroup chairman Michael O'Neill had planned a change in CEO for quite some time.

According to the report, "Vikram Pandit's last day at Citigroup swung from celebratory to devastating in a matter of minutes." After the company on Oct. 15 reported its

third-quarter results

, showing progress on Pandit's plan to shed non-core deposits and build capital ratios, leading to an eventual return of capital to investors through dividend increases and share buybacks, the CEO "was told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause."

Following Pandit's exit, Rochdale Securities analyst Richard Bove said that "the competitive culture of Citigroup which has resulted in constant upheaval on the second floor at Park Avenue is the norm for this company and its greatest weakness." It would appear that despite great changes in Citigroup's board of directors and a complete change in senior management since 2007, that the company's competitive culture is intact.

The other piece of news for Citigroup on Friday was that the company was fined $2 million by the state of Massachusetts, for improperly disclosing

non-public material information

about Facebook, before that company's now-infamous initial public offering.

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Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.