Merrill reports $10 billion loss

Merrill reports $10 billion loss
Nation's largest brokerage also takes $11.5 billion writedown on debt, subprime mortgages.

NEW YORK (CNNMoney.com) -- Merrill Lynch reported a quarterly operating loss of over $10 billion Thursday that was much worse than expected, and the company also announced an $11.5 billion writedown related to the subprime crisis.

Merrill (MER, Fortune 500) shares lost 1.8 percent in pre-market trading on the news.

For the quarter, Merrill posted a loss from continuing operations of $10.3 billion, or $12.57 a share. In the year-earlier period, Merrill reported a net profit of $2.3 billion, or $2.41 a share, on the same basis.

The results were far worse than anticipated. Merrill was expected to report a net loss of $4.57 a share on revenue of $702.1 million, according to analysts polled by earnings tracker Thomson Financial.

Merrill, the nation's largest brokerage, also said it would write down $11.5 billion on its collateralized debt obligations and subprime residential mortgages.

Prior to Merril's announcement, there had been intense speculation that the company could writedown as much as $15 billion during the quarter.

Merrill's results cap a particularly busy week for the financial services sector. Earlier this week, Citigroup (C, Fortune 500) recorded a $9.8 billion loss and took an $18.1 billion writedown on its subprime positions. Both JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) fared markedly better even though profit fell by more than a third each.

Seattle-based Washington Mutual (WM, Fortune 500) is due to report its fourth-quarter results after the closing bell Thursday.

CNN