Earnings Preview: Merrill Lynch & Co.

Merrill Lynch (MER) is expected to report Q2 earnings after market close Thursday, July 17, with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for EPS of 44c on revenue of $16.42B. The consensus range for EPS is 30c to 69c, while the consensus range for revenue is $12.18B to $17.92B, according to First Call.

Analyst Views

Merrill could report a $6B Q2 write-down, and the company is hoping to raise $5B by selling its 20% stake in Bloomberg, while selling a minimal stake in Blackrock (BLK), CNBC reported. The company could look to sell assets other than its Blackrock and Bloomberg stakes in order to raise more than $6B, the station added, citing inside sources.

Several research firms have issued pessimistic forecasts of Merrill Lynch's results in recent days. Wachovia predicted on July 8 that Merrill would report $5B of marks for the quarter, and the firm slashed their Q2 EPS estimate for Merrill to ($2.16) from 63c. The firm, which maintained their Market Perform rating, also reduced their 2008 EPS forecast to ($3.11) from 15c.

Citigroup on July 7 forecast that Merrill's results would indicate that it has some of the worst core trends among brokerage firms. Merrill Lynch will have to take more write-downs for Q2, due to its ABS/CDO and monoline exposure, J.P. Morgan predicted on July 3. They added that the broker will also be forced to increase its credit reserves due to its monoline exposure, and the firm maintained their Neutral rating.

Comments

[NYC observer]

Merrill Lynch above the law!
eeoc0sues0merrilllynch.../
EEOC goes after Merrill bigots!