Profit Warning Hammers UnionBanCal

Shares in UnionBanCal(UB) plummeted Friday after the company warned late Thursday that it would miss Wall Street's profit estimates for the second quarter as a result of increased credit losses.

The banking company said it expected to report operating earnings of 77 to 82 cents a diluted share. That is well short of earnings of 88 cents a share that analysts surveyed by First Call/Thomson Financial had projected for the banking company.

UnionBanCal tumbled 8 3/4, or 31%, to close at 19 15/16 after reaching a 52-week low of 19 9/16.

The company said it estimated its provision for credit losses at roughly $70 million, compared with $40 million in the first quarter.

"We are disappointed to report a lowering of our profit expectations for the current quarter," said Takahiro Moriguchi, president and chief executive, in a statement. "We have seen a decline in asset quality and taken appropriate action."

Moriguchi added that the company's "core earnings power remains strong."

UnionBanCal is the holding company for Union Bank of California, which operates some 250 branches in California, Oregon, and Washington and 18 branches overseas. The company is in the midst of a major cost-cutting and restructuring program.

UnionBanCal shares closed Thursday down 1 13/16, or 6%, to 28 11/16. The announcement was made after the markets closed, and the company's stock did not trade after hours on Instinet.

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