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Citing tough operating conditions and 'worldwide economic uncertainty,' CN Rail now predicts adjusted diluted earnings per share growth of between 15 and 20 per cent, versus its target of 20 per cent at the start of the year.Andrew Vaughan/The Canadian Press

Canadian National Railway Co. is lowering its earnings forecast for the year after profits sagged in its first quarter.

Citing tough operating conditions and “worldwide economic uncertainty,” the Montreal-based company now predicts adjusted diluted earnings per share growth of between 15 and 20 per cent, versus its target of 20 per cent at the start of the year.

CN is also aiming for an operating ratio – a measure of the railway’s efficiency that divides operating expenses by net sales – of just under 60 per cent, compared to its more ambitious January goal of 57 per cent.

The country’s largest railroad operator says revenues for the quarter ended March 31 rose five per cent year over year to $3.71 billion compared to $3.54 billion a year earlier.

Higher freight rates and coal and U.S. grain export volumes boosted revenue, but a smaller overall grain crop, fewer West Coast container shipments, global supply snarls and harsher winter weather all contributed to a net earnings drop of six per cent to $918 million last quarter.

On an adjusted bases, diluted earnings per share rose to $1.32 from $1.23 in the same period last year, slightly below analyst expectations of $1.38, according to financial data firm Refinitiv.

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