Analysts React to Merrill


Merrill Lynch on Thursday posted a first quarter loss, after taking several billion dollars of writedowns for subprime mortgages and other risky assets.

Merrill Lynch

The world's largest brokerage said the first quarter loss was $1.96 billion, or $2.19 a share, compared with net income of $2.16 billion, or $2.26 a share, in the same quarter last year.

The following is reaction from industry analysts and other experts:

Michael Holland of Holland & Co:

"It was my view that management was going to throw everything into this quarter. I would expect this is a clean-the-cupboards kind of report, including anything that John Thain could put into a quarter that was already going to be ugly. But the news from here should get brighter."

"Thain is really smart. As soon as he got his name on the door, he went out to the sovereign wealth funds. He's already raised a chunk of capital. He wanted to raise more, prememptively, than he needed. Now he's addressing the accounting issues."

Paul Mendelsohn, Chief Investment Strategist, Windham Financial Services:

"Rumors were floating around that it was anticipated their numbers would not be good. (The shares) are just a little bit to the low side. It came down a little last night in anticipation. But it doesnt' look like anything catastrophic will happen."

Mike Lenhoff, Chief Strategist at Brewin Dolphin:

"The expectations for earnings have been dramatically, greatly downgraded. It just strikes me that there is very little scope for shock value. Therefore I dont think the market will be going to be very fazed by what's happening in the financial sector."

Merrill Lynch Earnings

Jeffery Harte, Managing Director at Sandler O'Neill