Union Pacific won't meet 1Q estimate

Union Pacific won't meet 1Q estimate

Union Pacific Corp. said it won't meet its earnings estimate for the first quarter, citing a recent Arkansas Supreme Court decision that upheld a jury verdict against Union Pacific Railroad.

The transportation company, whose main operating company is Union Pacific Railroad, said Monday that a solid March performance could help it regain some of the momentum lost earlier in the quarter, but the outlook is unclear.

Union Pacific originally targeted 30 percent to 40 percent growth over the 57 cents a share earned from continuing operations in the first quarter of 2003. That would put estimated earnings for the current first quarter at about 74 cents to 80 cents a share.

The court decision last week affirmed a jury verdict against the railroad of $25 million in punitive damages to an Arkansas man who was injured at a Union Pacific Railroad crossing in 1998.

Including $5.4 million in interest, the verdict will cost about eight cents a share, the company said Monday. Union Pacific plans to record the expense in the first quarter, although it believes the decision was unconstitutional and may ask the U.S. Supreme Court for a review.

In addition to that expense, severe weather conditions in January and early February, high fuel costs and crew shortages increased costs and reduced revenue in the quarter, the company said.

"March revenue is generally the strongest of the quarter, and our current business demand remains encouraging," Chairman and Chief Executive Richard K. Davidson said in a written statement.