EXHIBIT 99.1

News Release


UNITED INDUSTRIAL CORPORATION
570 LEXINGTON AVENUE, NEW YORK, NY 10022


Contact:        Susan Fein Zawel
                Vice President Corporate Communications
                (212) 752-8787


           United Industrial Divests Transportation Overhaul Business

         - Part of Continuing Strategy to Focus on Defense Operations -


NEW YORK, July 26, 2002 -- United Industrial Corporation (NYSE: UIC) today
announced that it has sold its transportation overhaul contracts with the New
Jersey Transit Corporation and the Maryland Transit Administration to ALSTOM
Transportation Inc. for approximately $19.2 million. The price gives effect to
certain price adjustments, including those in the originally agreed upon price
set forth in the agreement previously announced on March 28, 2002.

Richard R. Erkeneff, President and Chief Executive Officer of United Industrial,
commented, "We are delighted to complete the sale of these transportation
overhaul contracts, marking another step forward in our strategy to build
shareholder value. The divestiture of these non-core programs advances our
long-term objective of refocusing on our core defense and aerospace operations.
In moving forward, we are particularly enthusiastic about our prospects in the
areas of Unmanned Aerial Vehicles, Simulation and Test Systems, and Engineering
and Maintenance Services. We have key competitive strengths in each of these
areas as well as a substantial backlog of work and attractive growth
opportunities."

ALSTOM is the global specialist in energy and transport infrastructure. The
Company serves the energy market through its activities in the fields of power
generation, power transmission and distribution, and the transport market
through its activities in rail and marine. ALSTOM's Transport Sector, with sales
of 4.4 billion euros and a 17% market share, is a leading supplier to the rail
industry world-wide.

United Industrial Corporation is a company focused on the design and production
of defense, training and energy systems. Its products include unmanned aerial


vehicles, training and simulation systems, and automated aircraft test and
maintenance equipment. The Company also offers logistical/engineering services
for government-owned equipment and manufactures combustion equipment for biomass
and refuse fuels.

Except for the historical information contained herein, information set forth in
this news release may contain forward-looking statements subject to risks and
uncertainties which could cause the Company's actual results or performance to
differ materially from those expressed or implied in such statements. The
Company makes no commitment to update any forward-looking statement or to
disclose any facts, events, or circumstances after the date hereof that may
affect the accuracy of any forward-looking statement. For additional information
about the Company and its various risk factors, reference is made to the
Company's most recent Annual Report on Form 10-K as filed with the Securities
and Exchange Commission.


       For more information, please visit United Industrial's web site at
                            www.unitedindustrial.com


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