UBS reported a third-quarter net loss of 830 million Swiss francs ($712M) on subprime-related trading writedowns of 4.2B francs, compared to earnings totaling 2.2B francs last year. The poor results exceeded the mid-range loss projection from a UBS update earlier this month, in which UBS said it would also cut 1,500 jobs from its investment banking division (full story). The net loss also was worse than analysts' average forecast loss of 668M francs, according to a Reuters poll. Third-quarter revenue fell 39% to 6.47B francs. In a statement, UBS said, "Markets remain uncertain, but based on current information, UBS should return to profitability at Group level in fourth quarter 2007." During the company's conference call, CEO Marcel Rohner commented, "While we are still disappointed with the result, we have a very strong set of numbers in particular in asset-gathering and the commission-based businesses," (earnings call transcript later today). The company noted that the fourth quarter has started with "good" results from all businesses, including its investment banking unit. An Allianz asset manager warned UBS still has exposure to subprime from its fixed-income and credit businesses and said, "If a further weakening of the markets there occurs, UBS will have to make additional writedowns." Shares of UBS trading on the NYSE lost 1.1% to $53.25 on Monday and shares in Zurich were last down 0.7% to 61.7 francs in late morning trading.
Commentary: UBS Confirms Loss; More Writedowns possible • The Writedown Leaderboard: Merrill Now in First • How Banks Calculate Their Write-Downs
Stocks to watch: UBS. Competitors: DB, CS, MER, C, HBC. ETFs: EWL, IXG
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