First Union Again Cuts Its Profit Outlook

First Union Corp., the sixth-largest U.S. bank, cut its profit forecast for the second time this year. Shares of the Charlotte, N.C., company fell $4.31 to close at $45.63 on the New York Stock Exchange. Chairman Edward Crutchfield, who tripled the size of the bank in the last 3 1/2 years by buying rivals, said he is swearing off acquisitions. “They got too aggressive in expanding,” said Michael Granger, a bank analyst at Fox-Pitt Kelton Inc. “They took on too much expense.” First Union said it expects 1999 earnings will be between $3.3 billion and $3.4 billion, or $3.40 to $3.50 a share. In January, the bank had said it expected to earn $4 a share, which was below analysts’ forecasts at the time. In 1998, profit before merger-related charges was $3.7 billion, or $3.77 a share. First Union blamed disappointing revenue growth from Philadelphia-based CoreStates Financial Corp., which it bought last year for $20 billion, as well as higher expenses from developing its Internet bank, reorganizing its branch system, and its agreement last month to buy Everen Capital Corp. for $1.1 billion. First Union expects a second-quarter profit of about $770 million to $800 million, or 80 cents to 83 cents a share, below the 97 cents average estimate of analysts surveyed by First Call Corp. In an effort to boost its stock price, which has declined 26% this year, the bank said it would buy back 50 million shares.