Merrill Lynch & Co. today reported a net loss from continuing operations for the full year 2007 of US$8.6 billion, down from a profit of US$7.1 billion in 2006. It also took further large writedowns for the fourth quarter.

Merrill Lynch’s net loss for the full year 2007 was US$7.8 billion. Net revenues for 2007 were US$11.3 billion, down 67% from US$33.8 billion in 2006, while the 2007 pre-tax loss from continuing operations was US$12.8 billion compared to pre-tax earnings from continuing operations of US$9.8 billion for 2006.

The Wall Street investment bank’s substantially reduced performance in 2007 was primarily driven by significant declines in fixed income, currencies & commodities (FICC) net revenues for the second half of the year, which more than offset record full year net revenues in equity markets, investment banking and global private client, and record first half net revenues from FICC.

During the second half of 2007, FICC net revenues were materially impacted by a weaker business environment and net write-downs that included US$7.9 billion in the third quarter and US$11.5 billion in the fourth quarter related to U.S. asset-backed securities collateralized debt obligations and U.S. sub-prime residential mortgages outside of the firm’s U.S. bank-related investment securities portfolio. In addition, credit valuation adjustments of US$2.6 billion related to hedges with financial guarantors on U.S. ABS CDOs were recorded in the fourth quarter of 2007.

For the fourth quarter of 2007, net revenues were negative US$8.2 billion, down from US$8.4 billion in the prior-year period, and Merrill Lynch’s fourth quarter 2007 pre-tax loss from continuing operations was US$14.9 billion. The net loss from continuing operations for the fourth quarter was US$10.3 billion, down substantially from net earnings from continuing operations of US$2.2 billion in the prior-year quarter. Merrill Lynch’s net loss for the fourth quarter of 2007 was US$9.8 billion.

“While the firm’s earnings performance for the year is clearly unacceptable, over the last few weeks we have substantially strengthened the firm’s liquidity and balance sheet,” said John Thain, the firm’s new chairman and chief executive officer. “In addition, a great majority of Merrill Lynch’s key businesses delivered record results in 2007, and as I look ahead to 2008, the firm is intensely focused on continuing this momentum and delivering growth and increased profitability for our shareholders and employees.”