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Despite Canada's second-coldest winter in 20 years, rising fuel costs and weak bulk-commodity traffic, Canadian National Railway Co. earned a passing first-quarter financial grade.


The Class I's quarterly net income of $252 million increased $22 million compared with first-quarter 2002.


However, CN's quarterly operating income of $374 million decreased 8 percent, revenue of $1.49 billion declined 1 percent and operating ratio of 75 worsened 1.9 points compared with the same 2002 period.


"The CN team did an outstanding job of managing the business in a quarter marked by major challenges," said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement. "Our revenue and expense performances were accomplishments — gains by our intermodal, petroleum and chemicals, and metals and minerals businesses almost totally offset an 11 percent reduction in bulk commodities revenues, and softer automotive and forest-product revenues."


CN's quarterly intermodal revenue rose 13 percent, petroleum and chemicals revenue, 6 percent, and metals and minerals revenue, 3 percent, compared with first-quarter 2002. Total carloads increased 4 percent.