The New York-based lender said earnings per share, excluding the impact of certain accounting adjustments for changes in the value debts and credits, were $1.11.
Wall Street analysts, who usually exclude such accounting items, had expected, on average, earnings of $1 a share, according to Thomson Reuters I/B/E/S.
Net income, under generally accepted accounting principles, was $2.93 billion (1.84 billion pounds), or 95 cents a share, down from $2.99 billion (1.88 billion pounds), or 99 cents a share, a year earlier.
Revenue from the company's ongoing securities trading and investment banking business declined 12 percent from the strong quarter a year earlier but rose 65 percent from the weak 2011 fourth quarter.
A set of assets that the company has been selling off or running down since the financial crisis, declined 29 percent from a year earlier to $209 billion (131 billion pounds), or 11 percent of total Citigroup assets.
While the operating environment improved in the first quarter, there is still much macro uncertainty and we will continue to manage risk carefully, Chief Executive Vikram Pandit said in a statement issued by the company.
Citi shares were up 50 cents, or 1.5 percent, to $33.91 in premarket trading.
(Reporting by David Henry in New York; editing by John Wallace)