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NEW YORK (AP) -- A Sandler O'Neill & Partners analyst on Tuesday cut his third- and fourth-quarter profit estimates on Merrill Lynch & Co. for the rest of the year, after Citigroup Inc. and UBS AG warned of sharp downturns in fixed income. On Monday, UBS said it probably lost money in the third quarter, while Citigroup estimated its third-quarter profit will fall about 60 percent. That followed the four major investment banks last month reporting accounting charges stemming from the credit crisis. In a note to clients, Sandler O'Neill analyst Jeff Harte said he expects income in Merrill Lynch's fixed income business, which sells investments like bonds, to decline 55 percent sequentially to $1.2 billion in the third quarter. He predicted Merrill Lynch will record a loss of $600 million on commitments to finance corporate buyouts. Harte cut his third-quarter profit estimate to $1.23 per share from $1.56 per share. Analysts polled by Thomson Financial forecast profit of $1.34 per share. For the fourth quarter, Harte cut his profit estimate to $2.32 per share from $2.43 per share. Analysts expect profit of $2.20 per share. Shares of Merrill Lynch climbed $1.70, or 2.3 percent, to $75.57 in afternoon trading.
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