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(Corrects throughout to clarify that Q4 profit fell 14 percent from year ago. Also corrects net income and EPS figures for the year-ago quarter)
* Q4 EPS C$1.08 vs C$1.23 year ago
* Revenue up 12 pct
* Ups div 20 pct to 32.5 Canadian cents
* Sees 2011 cash flow of C$850 mln
* Sees slower growth in 2011
Jan 25 (Reuters) - Canadian National Railway Co (CNR.TO) reported a 14 percent drop in quarterly profit and expects North American economic growth to slow this year, but raised its dividend 20 percent.
CN forecast increased depreciation expenses and a higher Canadian dollar for the year, but said it aims for double-digit growth in earnings per share.
Canada's biggest railway also approved a new program to buy back up to 16.5 million common shares.
October-December net income fell to C$503 million, or C$1.08 a share, down from C$582 million, or C$1.23 a share, a year earlier.
Revenue rose 12 percent to C$2.1 billion, helped by strong volumes.
Analysts had expected earnings of C$1.09 a share on revenue of C$2.1 billion, according to Thomson Reuters I/B/E/S.
CN's operating ratio, an important barometer measuring the railway's operating efficiency, was at 63.4 percent versus 65.3 percent a year ago.
CN narrowly avoided a strike by some 4,000 unionized clerical, mechanical and truck driver workers this week, after it reached last-minute tentative agreements on Monday with the Canadian Auto Workers union. [ID:nN24168226]
The company forecast 2011 free cash flow of C$850 million despite higher taxes.
Shares of Montreal-based CN ended at C$68.45 on the Toronto Stock Exchange on Monday. ($1=.9936 Canadian Dollar) (Reporting by Gowri Jayakumar in Bangalore; Editing by Unnikrishnan Nair)