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(Adds updates from conference call)
April 25 (Reuters) - Canadian National Railway Co lowered its full-year earnings forecast, citing weaker-than-expected freight demand in some markets and a strengthening Canadian dollar.
Canada's biggest railroad, which reported a 4.3 percent fall in first-quarter revenue, said it now expected 2016 adjusted earnings per share to match last year's C$4.44. The company in January forecast mid- to single-digits EPS growth.
Reduced freight volumes due to a slump in oil prices, a string of bankruptcies in the coal industry and increased competition from trucks have been weighing on railroad operators in Canada and the United States.
"We continue to experience high volatility and weaker conditions in a number of commodity sectors," Chief Financial Officer Luc Jobin said on an earnings call with analysts.
North American industrial production is also slowing down considerably, he said.
CN Rail said it expects its 2016 annual carload volume to decrease 4-5 percent from last year.
To counter declining freight volumes, railroad companies have been slashing costs.
Montreal-based Canadian National said its total operating expenses fell about 14 percent to C$1.75 billion ($1.38 billion)in the first quarter ended March 31.
The company said its operating ratio improved 6.8 percentage points to 58.9 percent. Operating ratio - a key metric for railroads - is operating costs expressed as a percentage of revenue.
Net income rose to C$792 million, or C$1 per share, in the quarter, from C$704 million, or 86 Canadian cents per share, a year earlier.
Canadian National reported an adjusted profit of C$1 per share, handily beating the average analyst estimate of 93 Canadian cents, according to Thomson Reuters I/B/E/S.
Revenue fell to C$2.96 billion, mainly pulled down by lower coal shipments due to weaker North American and global demand.
Volumes of energy-related commodities - coal, crude oil and frac sands - is expected to decline until a bottom is found later this year in the case of crude and sand, and in late 2017 in the case of coal, Chief Marketing Officer Jean-Jacques Ruest said on the call.
$1 = 1.27 Canadian dollars Reporting by Derek Francis and Kanika Sikka in Bengaluru; Editing by Sriraj Kalluvila