Citigroup’s $2.8 billion third-quarter loss came in at only half the expected level, while the Merrill release came in slightly worser than projected.
The Citi report comes from the Wall Street Journal:
Citigroup Inc. swung to a third-quarter loss — its fourth straight quarter in the red — as it wrote down another $4.4 billion in securities and banking and blamed weak revenues across all businesses on “the impact of a difficult economic environment and weak capital markets.”
Read what to expect in the quarterly reports of other major corporations.
The results show the bank – which had already racked up more than $40 billion in write-downs and other losses stemming from the mortgage meltdown over the past year — is still roiling from its mortgage-related securities and the credit crisis. It cut 11,000 jobs in the latest quarter — some 3% of staff – putting this year’s total at 23,000.
Still, the results were not as bad as expected. The loss and write-downs were about half the size of projections the company issued late last month.
Bloomberg provides the Merrill news:
Merrill Lynch & Co., the investment bank being taken over by Bank of America Corp., reported a fifth straight quarterly loss as the credit crisis saddled the firm with at least $9.5 billion of writedowns.
The third-quarter net loss of $5.15 billion, or $5.58 a share, compared with a deficit of $2.24 billion, or $2.82, a year earlier, New York-based Merrill said in a statement today. The average estimate of 15 analysts in a Bloomberg survey was for a loss of $5.18.
Merrill, led by Chief Executive Officer John Thain, turned to Bank of America CEO Kenneth Lewis last month after a crisis of confidence in Wall Street firms forced Lehman Brothers Holdings Inc. into bankruptcy. Merrill, hobbled by $52.2 billion in losses and writedowns from subprime-contaminated securities, has plunged 81 percent in New York trading from a peak of $97.53 at the start of last year.
“Every indication that we’ve had so far from companies that have pre-released earnings just shows that the third quarter was much worse than the second quarter,” said David Burg, a Purchase, New York-based analyst at Alpine Woods Capital, which manages about $7 billion, including Bank of America shares. “There was a much more significant pullback in the third quarter.”
As of this writing, stock futures are up, with Dow futures 76 points higher than yesterday’s close, and S&P 500 up nearly 8 points.
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Wow, they’re burning through the Treasury’s $25B preferred fast.