Morgan Stanley reported a $2.2 billion fourth-quarter loss, wider than the most pessimistic analyst's estimate, as it unexpectedly wrote down the value of fixed-income businesses and lost money in all three of its main divisions.
The loss of $2.24 a share for the three months ended Nov. 30 compared to a $3.59 billion loss, or $3.61 a share, the year earlier, the New York-based company said in a statement Wednesday. The average estimate of 16 analysts surveyed by Bloomberg was for a 34-cent loss; no estimate exceeded $1.15. The shares fell as much as 7.8%.
"I don't think anybody estimated the impact of the price destruction that took place in November," Colm Kelleher, Morgan Stanley's chief financial officer, said in an interview Wednesday. "We felt the fixed-income businesses were impaired by what took place in the quarter."
Morgan Stanley, which converted itself to a bank holding company during the quarter and accepted $10 billion in government bailout funds, took a $700 million writedown on the value of its Saxon Capital Inc. mortgage division; TransMontaigne Inc. fuel-distribution company; and Heidmar Inc., a U.S. oil-tanker business, Mr. Kelleher said. Most of the writedown was for Saxon, which Morgan Stanley bought in 2006 for about $706 million in cash.
On Tuesday, Goldman Sachs Group Inc., which also became a bank holding company in September, reported a net loss of $2.12 billion for the same period. It was the company's first quarterly loss since it went public a decade ago.