[ by Melanie Gretchen ] Citigroup, this week's first financial institution to report it quarterly earnings, reported better than expected earning in the quarter just ended.  Q2 earnings totaled $2.9 billion, or 95¢ a share, on lower revenues of $18.6 billion.  Compared to the same period last year, Q2 earnings fell 12%, whereas Q2 revenue fell 10%.  Nevertheless, the numbers beat analyst expectations - largely on the strength of its capital markets businesses. Earnings include a $219 million gain related to the mark-to-market valuation of Citi debt, and there was a 1-time loss of $424 million on the sale of a stake in Turkish bank Akbank T.A.S.  Excluding 1-time charges, Citi reported earnings of $1 a share on revenue of $18.8 billion.  Analysts had been expecting adjusted earnings of 89¢ a share on revenue of $18.9 billion. Revenue Breakdown: How the Firm Fared.

• Mergers and Acquisitions: Up 2% to $201 million, compared to last year. Estimate: $130 million, as predicted by Richard Staite, a London-based analyst with Atlantic Equities LLP.
• Fees from Managing Sales Bonds: Down 21% to $486 million.  Estimate: $331 million, as predicted by David Trone, an analyst at JMP Securities LLC.
• Fees from Equity-Underwriting Fees: Down 39% to $167 million.

• Trading Stocks and Bonds: Down 9% excluding the accounting adjustment, to $3.37 billion.  Estimate: $3.5 billion, as predicted by Moshe Orenbuch, an analyst at Credit Suisse Group AG.
• Trading: Down 15% to $4.54 billion.
• Fixed-Income Trading: Down 4% to $2.82 billion, due to gains in Anil Prasad’s currency-trading business and so-called rates, interest-rate products such as Treasuries, inflation-protected bonds and interest-rate swaps.

• Credit-Trading and Securities Products: Down – no further details provided.  [CI Note: Is that a bad sign?]
• Trading Shares: Down 29% to $550 million.
• Equity-Trading Revenue: Down 9% to $1.04 billion.

[Dealbook, 7/16/12] and [Bloomberg, 7/16/12]