OMAHA, Neb. — Union Pacific Corp. announced plans Wednesday to cut up to 1,000 jobs, or 2 percent of its work force, this year even as it reported its earnings rose 37.5 percent in the fourth quarter and beat Wall Street estimates, reports the Associated Press.
The nation’s biggest railroad also forecast that its first quarter earnings will drop up to 20 cents a share from the
86 cents a share it earned a year earlier. That includes $40 million in severance costs and rising fuel costs, company officials said.
For the full year, Union Pacific said it expects earnings to grow 5 percent to 10 percent from the $4.30 a share it had excluding one-time items in 2002.
Analysts surveyed by Thomson First Call were looking for earnings of 93 cents a share in the current quarter and $4.74 a share for 2003.
The announcements sent Union Pacific shares down $2.39, or 4 percent, to $57.11 in trading on the New York Stock Exchange (news – web sites).
The company plans to lay off up to 300 people by March and said 700 more positions will not be filled this year as people leave or retire. Union Pacific employs about 48,000 people.
Union Pacific wants to cut costs by up to 20 percent in 2003, amid concern about higher wages, increased health care costs, higher fuel prices and soaring insurance costs since the Sept. 11 terrorist attacks.
Union Pacific attributed its strong fourth-quarter earnings performance to higher productivity and revenue boosts from hauling automobiles and farm goods. It earned $378 million, or $1.41 a share, for the quarter ended Dec. 31 compared with $275 million, or $1.06 a share, a year earlier.
The latest results included 31 cents per share in one-time gains for tax adjustments and sale of land and track.