The Wall Street Journal [subscription required] reports that Merrill Lynch & Co. (NYSE: MER) announced a net loss of $12.01 a share -- it was expected to lose $4.57. The cause of the huge loss was $11.5 billion more in mortgage-related write-downs in addition to a $3.1 billion write-down on hedges with financial guarantors.

I am not surprised that it missed but I am a bit shocked by how far off analysts have been in estimating earnings for banks this reporting season. Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM) both missed their estimates. Citi was expected to lose 97 cents a share and it actually lost $1.99. JPMorgan was expected to make $0.94 and it made 86 cents. Why do these analysts get paid millions of dollars if their estimates are so far off? I would ask a similar question about JPMorgan's CEO and give the new CEOs at Citi and Merrill a pass.

Consistent with the pattern of pairing write-downs with capital raising, Merrill has written down $14.6 billion and raised $12.8 billion. Its capital came from selling a commercial-finance unit and garnering a combined $12.8 billion in capital infusions from a number of investors, including sovereign wealth funds of Singapore, Korea and Kuwait.

A bit of good news for Merrill was in equity-trading -- its revenue jumped 23% and global wealth-management, which saw pretax earnings climb 30% to $914 million, as revenue grew 12%. It remains to be seen whether growth here will offset losses in other parts of Merrill's operations.

Merrill is down 3.6% in pre-market.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in the other securities mentioned.