Citigroup announced Friday that its second quarter profits fell 37% as it continues to divest business units and reshape its organization.

The disappointing results, which beat analyst estimates, came a quarter after the New York-based banking company reported its strongest period in nearly three years, following the financial crisis which staggered, but didn't shutter, the company.

"While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter," Vikram Pandit, Citi's [C] chairman and chief executive officer, said in a press release.

Citi continues to sell ancillary business units. On July 13, it announced plans to divest its private equity fund of funds and co-investments businesses. It said it has entered into a definitive agreement to transfer the management and certain proprietary interests in its fund of funds, mezzanine funds, feeder funds and co-investment businesses to StepStone Group LLC and Lexington Partners.

Overall, the company reported a profit of $2.7 billion, or 9 cents a share, down from $4.28 billion, or 49 cents, a year earlier. The year-earlier quarter included a $6.7 billion gain from the combination of Citi's Smith Barney and Morgan Stanley [MS]. Revenue fell 33% to $22.1 billion.

The results beat analysts' estimates by four cents, according to Thomson Reuters.

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