Merrill Lynch today reported a first quarter net loss of $1.96 billion, or $2.19 per share, compared to net earnings of $2.16 billion, or $2.26 per share, a year ago.
First-quarter revenue fell 69 percent to $2.9 billion, largely due to write-downs and credit valuation adjustments totaling $4.5 billion related to the company’s CDO holdings.
The company’s net exposure to U.S. subprime residential mortgages fell from $2.7 billion to $1.4 billion during the first quarter, but exposure to Alt-A mortgages increased to $3.2 billion from $2.7 billion.
Net exposures related to prime residential mortgages increased to $30.8 billion, and non-U.S. residential mortgages declined to $8.8 billion.
The New York City-based banking giant also said it will reduce its headcount by 4,000 employees, or 10 percent of staff excluding FAs and investment associates, resulting in a $350 restructuring charge to be realized in the second quarter.
During the first quarter, Merrill cut 1,100 jobs, primarily related to the closure of First Frankin and the sale of ML Capital, leaving the company with a total workforce of 63,100.
Shares of Merrill Lynch, which have fallen more than 50 percent over the past year, were up 60 cents, or 1.34%, to $45.49 in midday trading on Wall Street.