Merrill Lynch posted the worst quarterly loss in its 94-year history this morning, recording a fourth-quarter net loss of $9.91 billion, or $12.01 per share, compared to a profit of $2.35 billion, or $2.41 per share, a year earlier.
The New York-based brokerage house wrote down $11.5 billion in mortgage-backed securities and CDOs, along with $3.1 billion in adjustments to hedge them.
Because of the hefty write-offs, Merrill posted negative revenue of $8.19 billion, down from revenue of $8.39 billion a year earlier.
Analysts surveyed by Thomson Financial expected a loss of $4.93 a share on revenue of $399 million.
The full-year loss of $8.05 billion, or $9.69 cents per share, compared to a profit of $7.31 billion, or $7.59 per share, in 2006.
CDO exposure was $4.8 billion at the end of the fourth quarter, down from $15.8 billion three months earlier, while exposure to subprime mortgages fell to $2.71 billion from $5.66 billion.
Earlier in the week, Merrill said it sold $6.6 billion of preferred stock to a group of investors including the Korean Investment Corp., the Kuwait Investment Authority and Mizuho Corporate Bank.
That’s in addition to the $5.6 billion Merrill raised from Singapore-based Temasek Holdings last month.
Regarding layoffs, Thain said they “are not going to be significant” and shouldn’t be a sizable share of the company’s 64,000-strong workforce.
Merrill Lynch was trading down $3.92, or 7 12%, to $51.17 in midday trading on Wall Street.