Citigroup, DragonWave: After-Hours Trading

NEW YORK ( TheStreet) -- Citigroup ( C) held its ground in extended trades on Wednesday after the stock finished above the vaunted $5 level for the first time in more than 15 months.

The shares closed the regular session at $5.08, gaining 14 cents, or almost 3%, as Wall Street got bullish about the banks ahead of their fiscal fourth-quarter reports. Portugal's successful bond sale and dividend buzz generated by a Wells Fargo analyst report and comments from JPMorgan Chase ( JPM) CEO Jamie Dimon about the bank's plans to eventually lift its payout also gave sentiment about the financial sector a boost.

As it is during normal market hours, Citigroup is typically the most active stock in the after-hours session. On Wednesday, nearly 26 million shares changed hands after the closing bell with the stock last quoted at $5.11, up 0.1%, according to Nasdaq.com. Volume in the regular session totaled more than 600 million, tops on the New York Stock Exchange.

Citigroup closed at $5 on Aug. 31, 2009 and despite a number of fleeting forays -- most recently on April 21, 2010 -- above $5 on an intraday basis since then, it hasn't able to hold above that level, which has debatable pyschological significance, until today.

Expectations for fourth-quarter results are on the rise for the big banks, and JPMorgan is slated to kick things off with its report before Friday's opening bell. Citigroup's numbers are on tap for next Tuesday, Jan. 18.

The current average estimate of analysts polled by Thomson Reuters is for the bank to report earnings of 8 cents a share for the three months ended Dec. 31 on revenue of $20.4 billion. Citigroup has beat Wall Street expectations for three straight quarters, but the revenue estimate would represent a slight sequential decline from its total of $20.7 billion in the third quarter.

At current levels, the stock is up roughly 40% in the past 52 weeks but analysts are still fairly bullish from here. Thirteen of the 22 analysts covering the shares are at either strong buy (4) or buy (9) with the remainder split between hold (7), underperform (1) and sell (1). The median 12-month price target of $5.50 has implied upside of 20%.

DragonWave

Shares of DragonWave ( DRWI) tumbled after the close, falling more than 14% to $7.42 on heavy volume of nearly 240,000, as the Canadian maker of packet microwave radio equipment for wireless networks swung to a loss in its latest quarter.

The company said it lost $500,000, breakeven on a per-share basis, for the three months ended Nov. 30 on revenue of $27 million. This performance compared to earnings of $1.2 million, or 3 cents a share, on revenue of $27.2 million in the previous quarter, and a profit of $11.6 million, or 34 cents a share, on revenue of $51.6 million in the same period a year earlier.

DragonWave also forecast a steeper sequential drop on the topline in its current fiscal fourth quarter ending in February, saying it expects revenue of $15 million while noting that visibility remains "very limited at this time" with both new and existing customers.

EXFO Inc.

After gaining more than 5% ahead of the report, shares of Canadian network testing equipment maker EXFO ( EXFO) leapt another 11% after the bell to $8.40 on volume of around 30,000 after topping its own expectations for its fiscal first quarter.

The company said it earned $14.1 million, or 23 cents a share, for the three months ended Nov. 30 with total sales rising almost 50% year-over-year to $67.6 million. EXFO's outlook called for earnings of 17 to 21 cents a share and sales ranging from $61 million to $66 million.

For its current fiscal second quarter, EXFO forecast earnings of 3 to 7 cents a share and sales of between $70 million and $75 million.

American Capital Agency

American Capital Agency ( AGNC) slipped on heavy volume in after-hours action after the Bethesda, Md.-based real estate investment trust gave a financial outlook for the fourth quarter and announced plans for a dilutive stock sale.

Excluding certain items, such as gains on its derivative instruments, the company said it expects its earnings to exceed $1.20 a share for the fourth quarter compared to an average estimate of 14 analysts polled by Thomson Reuters for a profit of $1.29 a share in the December period.

The stock sale is a public offering of 18 million common shares under an existing shelf registration statement. The deal includes an over-allotment option for the potential sale of an additional 2.7 million shares. No pricing information was announced.

Shares of American Capital Agency were last quoted at $29.04, down 2.2%, on volume of more than 300,000, according to Nasdaq.com.

KBR Inc.

A winner in late trades was KBR Inc. ( KBR), a Houston-based provider of engineering and construction services that offered a better than expected outlook for fiscal 2011.

KBR said it expects earnings of $2.05 to $2.30 a share for the 12 months ending next December. The current average estimate of analysts polled by Thomson Reuters calls for a profit of $2.04 a share in the period.

The company plans to hold a conference call on Thursday to discuss its outlook as well as a pair of recent acquisitions. Its results for the just-ended fourth quarter of fiscal 2010 are due on Feb. 24.

The stock last changed hands at $31.94, up 5.1%, on volume of almost 100,000. Based on a regular session close at $30.39, the shares had risen more than 45% in the past 52 weeks. Thirteen of the 19 analysts covering the stock have either strong buy (4) or buy (9) ratings.

At the levels it's seeing in after-hours action, the stock would set a new 52-week high, eclipsing its prior peak of $31.42 on Dec. 8. The analysts' median 12-month price target of $34 implies upside of almost 11%.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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