Merrill Lynch (MER) Lower Following Large Q2 Loss

July 17, 2008 4:30 PM EDT

Merrill Lynch (NYSE: MER) is down 6% after reporting a massive Q2 loss.

The company reported a Q2 loss of $4.97, versus the analyst estimate of ($1.91). Revenues for the quarter were $4.95 billion, versus the consensus of $3.27 billion.

Revenue was impacted by $3.5 billion from CDOs, and credit valuation adjustment of $2.9 billion.
Other losses included $1.7 billion from investment portfolio as well as $1.3 billion from residential mortgage exposure. Net revenues were negative $2.1 billion after adjustments.

Merrill Lynch also announced it has completed the sale of its 20% ownership stake in Bloomberg, L.P. to Bloomberg Inc., for $4.425 billion, and as part of this transaction has entered into a long-term service agreement. Merrill Lynch is also in negotiations and has signed a non-binding letter of intent to sell a controlling interest in Financial Data Services, Inc. (FDS), based on an enterprise value for FDS in excess of $3.5 billion. FDS is currently a wholly-owned subsidiary of Merrill Lynch and is a provider of administrative functions for mutual funds, retail banking products and other services within Global Wealth Management.

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