Merrill Posts Third Straight Loss, Announces About 3,000 Job Cuts
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Merrill Lynch & Co. posted its third straight quarterly loss and said it will cut about 3,000 more jobs after the credit-market seizure forced the investment bank to write down about $6.5 billion of debt.
The smaller-than-estimated charge helped push Merrill shares up as much as 4.7%. Analysts including Roger Freeman of Lehman Brothers Holdings Inc. had predicted markdowns of as much as $8 billion.
The first-quarter net loss of $1.96 billion, or $2.19 a share, compared with earnings of $2.16 billion, or $2.26, a year earlier, Merrill said.
It’s “not really a disappointment even though they missed on the earnings line,” chief market strategist at LPL Financial Group in Boston, Jeffrey Kleintop, said. “This is well within the range of expectations.”
The chief executive officer, John Thain, who joined in December, said today he’s “optimistic” about the firm’s prospects for the year, following a “more difficult next couple of months.” His comments echo remarks by his counterpart at JPMorgan Chase & Co., Jamie Dimon, who said Wednesday that the credit crisis is more than half over.
