Merrill in $11.5 billion subprime writedown

Source: Exec Digital USA

Date :1/17/2008 5:45:33 AM

Merrill Lynch continued its bad run on Thursday saying it lost nearly $10 billion in the fourth quarter following an $11.5 billion asset writedown.

The ailing brokerage firm posted a net loss of $9.83 billion, or $12.01 per share, compared to a profit of $2.3 billion, or $2.41 per share, a year earlier.

Merrill had negative revenue of $8.19 billion, down from revenue of $8.39 billion a year earlier, badly missing analyst projections for a loss of $4.70 per share.

It also suffered $3.1 billion of writedowns in the quarter from hedges with financial guarantors.

Unacceptable

Chief Executive Officer John Thain who replaced ousted CEO Stan O'Neal last month called the results "clearly unacceptable.''

Both Merrill and Citigroup are the Wall Street firms that have been the hardest hit by the subprime mortgage crisis. On Tuesday, Citi said it lost nearly $10 billion in the fourth quarter following an $18.1billion asset writedown.

January 17, 2008