Magazine article American Banker

4Q Earnings: Merrill: We're `Well Positioned'

Magazine article American Banker

4Q Earnings: Merrill: We're `Well Positioned'

Article excerpt

After slashing 20% of its work force and divesting some of its international operations in 2001, Merrill Lynch & Co. can handle an uptick in business when the capital markets improve, its chief financial officer says.

Thomas H. Patrick said the New York company will keep focusing on its traditional business lines this year, such as equities -- which he called a "cornerstone" -- but also expand into other areas. Merrill this month announced plans to start a unit that will offer structured financing to middle-market firms.

"Merrill remains well positioned for the long-term growth trend in financial services," Mr. Patrick said in an earnings conference call Wednesday. "In spite of the uncertain revenue outlook, we are confident that our actions in 2001 position us for sustained activity if revenues do increase."

In large part because of those actions, Merrill reported a net loss of $1.3 billion, or $1.51 per diluted share, for the fourth quarter -- its first loss since 1998. It took a $2.2 billion pretax charge for the three months as it sought to cut costs in the market downturn.

Without the charge, but including charges related to the Sept. 11 attacks, which rendered the company temporarily homeless, Merrill's net earnings were $461 million, or 48 cents a share, matching analysts' expectations. For the year profits sank 89%, to $573 million, or 57 cents per diluted share.

Merrill had warned Wall Street weeks ago of a massive charge, but on Wednesday it provided more details about the source of the charge. …

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