Citigroup Inc. posted a $4.28 billion profit, buoyed by gains from selling control of its Smith Barney brokerage and beating analysts' estimates as the bank shed assets to compensate for loan losses.

The second-quarter profit was 49 cents a share, compared with a loss of $2.5 billion, or 55 cents, a year earlier, New York-based Citigroup said today in a statement. Excluding the Smith Barney gain of $6.7 billion, Citigroup had an operating loss of about 27 cents a share. That was better than the 33-cent average loss estimate of 12 analysts in a Bloomberg survey.

Consumer and business loan delinquencies kept rising, giving Chief Executive Officer Vikram Pandit little relief from the financial crisis that forced him to take a $45 billion government bailout and unload some of his biggest units. The bank, once the nation's largest by assets, now ranks third after Bank of America Corp. and JPMorgan Chase & Co.

"This company is going to be shrinking," said Ed Najarian, an analyst at institutional brokerage International Strategy & Investment Group in New York. "You've got to factor that into your analysis of the ability to absorb losses over the next 18 months."

Smith Barney, now part of a joint venture controlled by former Pandit employer Morgan Stanley, had $10.2 billion of revenue last year, or 19 percent of Citigroup's total.

The company's share price is down 95 percent from a December 2006 peak, even after jumping 17 percent this week amid signs the worst of the recession may be over. The stock closed at $3.03 in composite trading on the New York Stock Exchange yesterday.