investment bank Merrill Lynch & Co reported a net loss of $2.24 billion, or
$2.82 a share in the third quarter, compared with a net income of $3.05 billion
a year-earlier period with record subprime write-downs of $7.5 billion.
the number three securities firm on the Wall Street, said it added about $2.5
billion of writedowns to the $5 billion it disclosed earlier this month.
had warned earlier this month that it would post a net loss of up to 50 cents
a share because of writing down $4.5 billion in collateralised debt obligations
and subprime mortgages and a net $463 million loss on leveraged finance commitments.
stock is the third worst in 2007 among securities firms after E''Trade Financial
Corp., which had home-loan losses at its online bank, and Bear Stearns Cos, where
two hedge funds lost $1.6 billion of clients'' money. Merrill is down 28 per cent
in New York trading.
Sachs Group Inc., the biggest securities firm by market value, on the other hand,
gained 12 per cent. Morgan Stanley, the No 2 securities firm is down 5.9 per cent.
Merrill, the third-biggest securities firm, is the only one of Wall Street''s five
largest to report a loss from the credit contraction. All the companies are based
in New York.
reported a 79 per cent increase in profit for the three months ended August 31
after betting on a drop in prices of securities tied to home loans. Morgan Stanley
said profit from operations fell 7 per cent in the quarter.
also had to write off $100 million related to First Franklin Financial Corp.,
a home-lending company that Merrill bought for $1.3 billion on December 30.
credit markets also forced Merrill to write down the value of leveraged buyout
loans that the firm had to make after investors refused to finance them. Those
devaluations totalled $463 million, after underwriting fees, the company said
in its statement.