CIT Misses Expectations Amid Restructuring Costs

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 [e-mail]

(END) Dow Jones Newswires

February 02, 2016 08:05 ET (13:05 GMT)

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