NEW YORK (AP) -- CIT Group Inc. on Tuesday surprised Wall Street by posting sharply higher fourth-quarter earnings, as the commercial lender reduced interest expenses after cutting its debt. Shares of CIT Group rose more than 6 percent in morning trading.
The New York-based company reported net income of $206.8 million, or $1.03 per share, for the three months ended Dec. 31. That compared with earnings of $36.3 million, or 18 cents per share, in the 2011 quarter.
Analysts surveyed by FactSet were expecting a smaller profit of 61 cents per share in the latest quarter.
Shares of CIT Group rose $2.57 to $43.19 in morning trading. The stock briefly climbed as high as $43.49, topping its previous 52-week high of $43.35.
CIT Group has strengthened its balance sheet since the company's bankruptcy reorganization in late 2009, including eliminating or refinancing high-cost debt. The company eliminated the last of its $31 billion in restructuring-related debt during last year's third quarter. The moves, along with currently low interest rates, have reduced the company's debt costs.
In the latest quarter, CIT Group's interest expenses dropped nearly 47 percent from the year-ago quarter to $366.6 million.
That improvement was partly offset by a reduction in interest income, which fell 27 percent to $357 million.
Total non-interest income, or income from fees and other sources, slipped nearly 2 percent to $623.7 million.
Funded new business volume increased 6 percent to nearly $3.1 billion.
The company provides financing and leasing for small and midsized companies, and has more than $33 billion in financing and leasing assets. It helps retailers pay for inventory and offers import and export financing, among other services.
CIT Group reported no provision for credit losses in the latest quarter, compared with the $16 million provision in the year-ago period. Net charge-offs, or loans the company doesn't expect to collect on, fell to $17 million from $24 million.
CIT Group reported total assets of $44 billion as of Dec. 31, up about $300 million from three months earlier, but down from $45.3 billion a year ago.
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