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During the first quarter, Union Pacific Corp. has been dealing with a $30 million lawsuit, crew shortage and adverse weather — a combination that likely will prevent the company from meeting the low end of its initial earnings estimate, according to a prepared statement.

UP officials had expected to increase quarterly earnings per diluted share from continuing operations between 30 percent and 40 percent to about 57 cents. But a recent Arkansas Supreme Court decision upholding a $30 million jury verdict against the railroad pertaining to a 1998 grade-crossing accident is projected to reduce earnings about 8 cents per share.

"We believe the Arkansas court's decision to affirm a jury verdict against the railroad that includes $25 million in punitive damages is unconstitutional and contrary to recent decisions of the U.S. Supreme Court," said UP Chairman and Chief Executive Officer Dick Davidson. "A full review of the decision is underway and, although we may seek review by the Supreme Court, we will record this expense in the first quarter."

Also, severe January and February weather conditions have hampered UP's efforts to restore network fluidity, and high fuel costs and a lingering crew shortage has increased costs and reduced revenue, Davidson said.

"As we look to the remainder of the quarter, our outlook is unclear," he said. "March revenue is generally the strongest of the quarter and our current business demand remains encouraging. We are hopeful that a solid March performance will help us regain some of the momentum we lost earlier in the quarter."