A steep first-quarter loss on write-downs for Merrill Lynch  (AP) (17-04-2008)

NEW YORK (AP) -- On Thursday Merrill Lynch announced it plans to cut 4,000 jobs as a further $6 billion write-downs are forcing it to a third losing quarter.

These write-downs caused Merrill Lynch to lose $2.14 billion, or $2.19 per share, after paying preferred dividends, compared to a profit of $2.11 billion, or $2.26 per share, a year earlier.

Merrill Lynch posted negative revenue in its fixed-income trading business and a 40 percent slump in investment banking fees. This caused total revenue to slip 69 percent to $2.93 billion from $9.6 billion a year earlier.

Results missed Wall Street projections for a loss of $1.99 per share on $3.7 billion of revenue, according to analysts polled by Thomson Financial.

Despite the turbulence, Merrill Lynch Chief Executive John Thain said the company has $82 billion of excess liquidity to help protect against choppy market conditions. He said Merrill Lynch remains "well capitalized."

After joining Merrill four months ago, Thain pledged to clean up the brokerage's balance sheet and take steps to make it more profitable. He already secured more than $12 billion worth of new capital, and now has unveiled a plan to trim the company's ranks.

Shares of Merrill Lynch fell 49 cents to $44.40 in pre-market trading after closing Wednesday at $44.89. The stock is down 53 percent from where it traded one year ago.

Source AP