Opening View: Merrill Lynch Announces Additional Mortgage-Related Write-Downs

Merrill Lynch (MER: sentiment, chart, options) was attempting to monopolize headlines this morning, after the company announced that it will write down another $5.7 billion in mortgage-related debt in the third quarter. The financial firm stated that it plans to issue new stock to raise $8.5 billion, and stated that it will sell $30.6 billion of collateralized debt obligations (CDOs) to an affiliate of private-equity fund Lone Star Funds for about $6.7 billion, or roughly 22 cents on the dollar.

In merger-and-acquisition news, Sirius Satellite Radio (SIRI: sentiment, chart, options) this morning reported that it has completed its purchase of XM Satellite Radio (XMSR: sentiment, chart, options) ; SIRI expects costs savings from the deal of about $400 million in 2009. The new company – named Sirius XM Radio – is expected to have more than 18.5 million subscribers. The combined company will continue to trade under the ticker symbol SIRI.

In earnings news, Alpha Natural Resources (ANR: sentiment, chart, options) reported second-quarter net income of $74.3 million, or $1.04 per share, compared to $4.7 million, or 7 cents per share, a year prior. Revenue for the quarter skyrocketed to $732.2 million, compared to $435.3 million in the period a year ago. Analysts, on average, were predicting earnings of 51 cents per share on revenue of $571 million. The company attributed the pleasant profit to strong global demand for its metallurgic coal, with coal sales surging 63% surging the quarter.

Elsewhere, Sony Corp. (SNE: sentiment, chart, options) announced that its quarterly profit plunged to 34.98 billion yen ($326.9 million), nearly halving itself from a year earlier and coming in well below the 52 billion yen ($486 million) analysts had predicted. The company attributed the bleak news to a stronger Japanese currency, a lack of Spider-Man 3 revenue, and price competition in the core electronics sector. The firm also reduced its full-year profit guidance to 240 billion yen ($2.24 billion) from previous guidance of 290 billion yen ($2.71 billion).

Earnings Preview

Other companies expected to step into the earnings confessional today include: General Motors (GM), Valero Energy (VLO), EOG Resources (EOG), Viacom (VIA), and RF Micro Devices (RFMD), amongst others. Keep your browser at SchaeffersResearch.com throughout the day for more.

Opening View: Merrill Lynch Announces Additional Mortgage-Related Write-Downs