Merrill Lynch & Co. Inc., which has agreed to sell itself to Bank of America Corp., posted its fifth straight quarterly loss Thursday, reporting another $9.5 billion in writedowns of troubled assets.
The world's largest brokerage firm by number of brokers said its net third-quarter loss widened to $5.15 billion, or $5.58 a share, from $2.24 billion, or $2.82 a share, a year earlier.
Merrill, which already had been clobbered by about $40 billion in writedowns related to subprime mortgages, said it has made "significant progress in balance sheet and risk reduction," having cut 98% of its exposures to U.S. alternative-A mortgages. In July it had projected third-quarter writedowns of $10.6 billion.
Merrill said it cut another 5% of its work force during the quarter and recorded another $39 million in charges for job cuts, primarily in technology, on top of $445 million in charges recorded in the second quarter.
John Thain, Merrill's chief executive officer, said that the company continues "to reduce exposures and deleverage the balance sheet prior to the closing of the Bank of America deal."
Mr. Thain is to stay on as president of the combined company's global banking, securities, and wealth management business.
Merrill recorded negative revenue of $1.17 billion, compared with negative revenue of $1.93 billion in last year's third quarter. It attributed the negative figures to the writedowns.
On average, analysts polled by Thomson Reuters were expecting a loss of $5.22 a share on revenue of $760 million.
The writedowns included $5.7 billion on the sale of a collateralized debt obligation and $3.8 billion on real-estate-related assets, government-sponsored entities, and broker-dealers.
Merrill was also hurt by $2.6 billion in net losses from asset sales, a $2.5 billion payment to Singapore's Temasek Holdings related to a common stock offering, and a $425 million expense for buybacks of auction-rate securities.
Those were offset in part by $7.1 billion in gains from Merrill's sale of its stake in Bloomberg LP and credit-spread widening.