(Corrects figure for total write-downs and adjustments in headline and 1st paragraph)
By Tim McLaughlin
NEW YORK, Jan 17 (Reuters) - Merrill Lynch & Co Inc MER.N on Thursday posted a quarterly loss of nearly $10 billion after write-downs and adjustments totaling about $16 billion as bad subprime mortgage bets forced the brokerage to sell stakes in the company to foreign investors to raise capital.
Recently named Chief Executive John Thain said in a conference call the world’s largest brokerage will ease risk-taking but that it has enough capital to move forward after $12.8 billion in capital infusions from U.S. and foreign investors.
Merrill shares were down 2.7 percent in premarket electronic trading in what analysts said was uncertainty about whether there could be still more writedowns ahead in coming quarters.
“The loss seems higher-than-expected,” said Peter Boockvar, an equity stategist at Miller Tabak & Co in New York. “The writedown, I guess was large, about in line. But we knew that it was going to be bad.”
Analysts expected Merrill’s write-down to land anywhere from $10 billion to $15 billion. For the year, Merrill’s subprime mortgage-related losses totaled nearly $23 billion.
Asked if the latest writedowns meant the company was wiping the slate clean, Boockvar said: “Prices (on mortgage related securities) continue to drop. So yeah, the slate is clean for today, but prices continue to drop. It’s just marking to market.”
Merrill reported a fourth-quarter net loss of $9.8 billion, or $12.01 a share, the largest in the company’s history. It turned a profit of $2.3 billion, or $2.41 a share, in the year-ago period.
The results eclipse the $2.3 billion loss in the third quarter when Merrill recorded an $8.4 billion write-down.
In a statement, Thain called the results “clearly unacceptable.” But in the past month, Merrill has fortified its balance sheet with nearly $13 billion in capital infusions from U.S. and Asian investors. (Additional reporting by Ellis Mnyandu, editing by Mark Porter and Dave Zimmerman)