Merrill Lynch to Cut Jobs
Merrill Lynch & Co (MER.N: Quote, Profile, Research) on Thursday posted a quarterly loss of $2 billion and said it planned to cut 2,900 jobs after recording more than $9.5 billion in write-downs and losses on subprime mortgages and other risky assets.
The results were worse than analysts’ gloomy expectations, and shares of the world’s largest brokerage fell more than 2 percent in premarket trading. Chief Executive John Thain is trying to turn the company around as it struggles with the aftermath of bad bets on subprime mortgages and repackaged debt. He is increasing the investment bank’s business in emerging markets and cutting costs to help offset write-downs.
Merrill Lynch reported losses, write-downs and reserve increases of $1.5 billion on collateralized debt obligations, $925 million on loans financing leveraged buyouts, $3.5 billion on an investment portfolio, more than $800 million on residential mortgages, and $3 billion for exposure to bond insurers.
Merrill Lynch’s first-quarter net loss was $1.96 billion, compared with a year-earlier profit of $2.16 billion.
Including preferred stock dividends, the loss was $2.14 billion, or $2.19 per share, and compared with a profit of $2.11 billion, or $2.26 a share, a year earlier.
The loss from continuing operations was $2.20 per share, wider than the analysts’ average forecast of $1.96, according to Reuters Estimates.
Net revenue declined 69 percent to $2.93 billion. Analysts expected $3.35 billion.