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UP cuts jobs, profit target
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December 27, 2000: 6:27 p.m. ET
Owner of nation's largest railroad says that rail volume near flat, cuts 2K jobs
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NEW YORK (CNNfn) - Union Pacific Corp., owner of the nation's largest railroad, warned it would miss fourth-quarter earnings forecasts and said it would cut staff and capital spending to respond to a slowing economy.
The railroad said it now expects earnings before special items of 87-to-90 cents a share in the quarter, down from 95 cents a share a year earlier. Analysts surveyed by earnings tracker First Call were looking for earnings of 93 cents a share in the period.
 The Omaha, Neb.-based company said it would take a $70 million after-tax charge, or 26 cents a share, in the current period to deal with severance costs of cutting about 2,000 jobs. That cut at Union Pacific Railroad, its primary subsidiary, will include both union and nonunion employees and represents about 4 percent of its 50,000-employee work force. About half the cut will come through attrition, the rest through an early retirement program and involuntary layoff.
Union Pacific did not give details of its planned cuts in capital spending.
"The downward trend in the economy has accelerated sharply in the past few weeks," said a statement from Dick Davidson, the company's CEO. "The railroad's carloadings are expected to rise by only one percent over a year ago, considerably below our forecast. An increasing number of our customers report that their business levels have weakened, and few see any signs of significant improvement."
Shares of Union Pacific (UNP: Research, Estimates) gained $1.44 to close regular-hours trading at $52.63 Wednesday, ahead of the warning. 
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Union Pacific Corp.
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