NEW YORK (Bloomberg) - Merrill Lynch & Co., the third biggest US securities firm, may record losses of as much as $4 billion on fixed-income assets, resulting in the lowest quarterly earnings in almost six years, Goldman Sachs Group Inc. analyst William Tanona said.

Merrill shares fell as much as 2.8 percent after Tanona cut his third-quarter earnings estimate to 15 cents a share from $1.95. For the full year, Tanona said he expects earnings of $6.75 a share, or 25 percent less than his previous prediction.

The losses would exceed those reported last week by Goldman, Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. New York-based Merrill may have to write down the value of mortgages, corporate loans and collateralised debt obligations, Tanona wrote in a report sent to clients yesterday.

Merrill "appears to be caught in the crosshairs of a number of headwinds in the quarter," Tanona said. The firm's third quarter ends this month.

Jessica Oppenheim, a Merrill Lynch spokeswoman, declined to comment.

Merrill shares fell $2.09, or 2.9 percent, to $70.03 at 2:46 p.m. in New York Stock Exchange composite trading. They have declined almost 25 percent this year.