CORRECTED-UPDATE 2-Canadian National Railway profit beats Street view as costs fall

Wed Jan 27, 2016 10:51am EST
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(Corrects seventh paragraph to show operating ratio decreased, not increased, bu 3.7 points in 2015 to 58.2 percent)

By Allison Lampert

Jan 26 (Reuters) - Canadian National Railway Co reported a better-than-expected fourth quarter profit and raised its 2016 quarterly dividend by 20 percent as costs fell on lower fuel expenses.

The company, which reported 2015 adjusted profit of C$4.44 ($3.15) per share, also said it expected earnings per share to grow in the mid-single digit percent in 2016.

However, Canadian National Railway expects lower volumes during the first quarter of 2016, compared with the same period a year earlier, because of weaker demand for the transport of iron ore and crude by rail.

"We are not counting on a rebound in commodities," CN Chief Marketing Officer Jean-Jacques Ruest told analysts on a call.

Chief Executive Officer Claude Mongeau said CN has become more efficient as it faces a softer Canadian economy and increased competition with trucks because of lower fuel prices.

"We are facing an uncertain environment," Mongeau said, who has returned to work following treatment for a precancerous soft-tissue tumor in his larynx.   Continued...