10:30AM New York – Bear Stearns swung to a net loss in the fourth quarter and annual profit fell 90% from a year ago.

Bear Stearns (BSC: chart) reported its first quarterly loss as a public company after taking losses in its sub-prime mortgage business.

“We are obviously upset with our 2007 results, particularly in light of the fact that weakness in fixed income more than offset strong and, in some areas, record-setting performance in other businesses,” said James E. Cayne.

In early November the company announced that it anticipated write-downs of approximately $1.2 billion in mortgage inventory net of hedges. At November 30, total net inventory write-downs were $1.9 billion.

These write-downs served to reduce fourth quarter diluted earnings per share by $8.21. Including these write-downs the company reported a loss for the fourth quarter ended November 30, 2007 of $6.90 per share compared to profit of $4.00.

The net loss for the fourth quarter of 2007 was $854 million as compared with net income of $563 million for the fourth quarter of 2006. Net revenues for the 2007 fourth quarter were a loss of $379 million down from revenues of $2.4 billion for the 2006 fourth quarter.

For the fiscal year the company reported $1.52 diluted earnings per share, compared with $14.27 for fiscal 2006. Net income for the fiscal year was $233 million compared with $2.1 billion earned in fiscal year ended November 30, 2006.

Net revenues for the 2007 fiscal year were $5.9 billion, compared with $9.2 billion in the prior fiscal year. The after-tax return on common stockholders’ equity was 1.8% for fiscal 2007.