Arkansas court action will cut UP earnings

Railway Age, April, 2004

Union Pacific announced last month that its first quarter earnings would be cut by about eight cents a share due to a decision by the Arkansas Supreme Court upholding the award of $30 million, including $25 million in punitive damages, to a man hurt at a UP grade crossing in 1998. Severe weather, higher fuel costs, and crew shortages also had an impact.

UP's earlier guidance had targeted first-quarter earnings 30% to 40% higher than the 57 cents per share earned in the first quarter of last year. That would have produced earnings this year of 74-to-80 cents a share. A Thomson First Call survey estimated earnings of 79 cents prior to UP's revised guidance. UP said the cost of the Arkansas court's award would be recorded against first-quarter earnings, though it was considering an appeal to the U.S. Supreme Court.