The nation's sixth-largest bank said operating earnings, including charges, are expected to range from 87 cents a share to 89 cents for the quarter, against the First Call consensus of 92 cents.
The bank plans to cut 5,850 jobs, or 7 percent of its workforce in the restructuring effort, for which First Union expects to take a $380 million pretax charge.
The cuts "will be broad-based from a geographic perspective," said spokesman Jeep Bryant. "Exiting the indirect auto loan business and selling some factoring assets are a couple of areas we targeted."
First Union shares rose 3 3/16 ahead of the release on Thursday to 55 ¼. Excluding charges, First Union said in a release it sees profits on target for the year at about $4 a share.
The bank had been bracing investors for the cost-cutting plan for over a month.
"Obviously, it's needed," said Tom McCandless of CIBC Oppenheimer. "They've needed to rein in their expenses for some time. They had a revenue/expenses imbalance all last year."
The bank said it expected the restructuring plan to deliver pretax cost savings of about $400 million for the year, but that operating expenses would rise 3 percent to $8.2 billion over 1998.
"Expenses in non-core businesses and non-revenue producing functions will be reduced through the restructuring in order to continue significant investment in high growth businesses such as Capital Markets, Capital Management and the retail delivery network."
First Union said, "As a result, the company does not expect the restructuring plan to adversely affect its revenue growth."
By EMILY CHURCH