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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (10469)	12/16/1999 8:25:00 AM
From: Justa Werkenstiff	Respond to of 15132

First Union Tells Analysts to Lower Profit Estimates for 2000 Charlotte, Dec. 15 (Bloomberg) -- First Union Corp., which twice this year warned it wouldn't meet its profit goals, is telling analysts to lower their expectations for next year's earnings, analysts said. The sixth-largest U.S. bank will earn less than it expected in 2000, in part because it will spend more to hire tellers and other branch employees to lure back customers it lost when it fired employees to cut costs. The average analyst estimate of First Union's 2000 earnings per share will fall to $3.70 a share from $3.74 a share after seven of 28 analysts surveyed by First Call Corp. lowered their estimates. Many of those lowered their estimates to about $3.55, and others may follow. ''They completely screwed up their branch banking system and they're now trying to retrieve a bad situation,'' said bank analyst Larry Cohn of Ryan, Beck & Co. He lowered his 2000 estimate to $3.55 from $3.90 after speaking with the company. Cohn rates First Union stock a ''hold'' and expects the stock to reach $36 to $37 in the next 12 months. Today it fell 15/16 to 34 in late trading. The stock is down 44 percent this year as the Charlotte, North Carolina-based bank twice cut its profit forecast for 1999. It blamed last year's acquisition of Philadelphia-based CoreStates Financial Corp., along with higher expenses from developing its Internet bank and reorganizing its branch system. ''They put in a new operating system they thought would allow them to reduce staffing levels; they reduced the staffing levels only to find that service quality fell,'' Cohn said. ''That action took what was going to be a tough merger with CoreStates and made it worse.'' Job Cuts, Rehires Cost cuts at the bank have included cutting 5,850 jobs, or 7 percent of the workforce. In July, First Union said it would hire more than 2,000 tellers after it realized its branch staff wasn't adequately serving customers. The reduction in profit outlook came after First Union's board met yesterday. The company did not respond to a request for comment on the meeting. Dec/15/1999 15:45