Thomas Wiesel shares fall after firm swings to 1Q loss

The stock lost 32 cents, or 4.9 percent, to $6.27 in midday trading. It approached its 52-week low of $6.07 earlier in the session and remains almost 70 percent off its high of $20.80.

The firm posted a loss of $17.8 million, or 54 cents per share, after earning a profit in the year-ago period. The operating loss reached 45 cents per share, much wider than the 9 cents per share analysts expected, according to Thomson Financial.

Investment banking revenue plunged 78 percent to $11.5 million as tight credit markets made it difficult for companies to finance acquisitions.

"The equity capital markets environment in the first quarter of 2008 was extremely challenging," Chief Executive Thomas Wiesel said.

Sandler O'Neill & Partners analyst Richard Repetto said management gave a "pessimistic" forecast for investment banking in the current quarter. He reduced his earnings estimates for 2008 as a result, and now expects the company to lose 48 cents per share from his previous estimate of a profit of 54 cents per share. The average estimate of analysts polled by Thomson Financial is for profit of 23 cents per share although that figure does not include revisions after the company's first-quarter results.

But the analyst maintained a "buy" rating on the shares because of a restructuring plan that aims to cut costs and increase the firm's fee-based business in asset management.