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An improving economy and the sale of a Toronto-area rail line helped boost CN’s first-quarter 2010 financial results. (Note: All figures are in Canadian dollars)

The Class I posted net income of $511 million, up 21 percent compared with first-quarter 2009. Results include an after-tax gain of $131 million from the sale of a rail line to a Toronto-area transit agency.

Revenue increased 6 percent to $1.96 million, while carloads increased 16 percent and revenue ton-miles increased 14 percent. Operating income rose 25 percent to $603 million and the operating ratio clocked in at 69.3 percent, compared with an adjusted operating ratio of 71.7 percent in first-quarter 2009.

“We delivered a solid winter operating performance, allowing us to accommodate increased freight volumes at low incremental cost and significantly improve service to help our customers take advantage of the stronger-than-expected economic recovery,” said President and Chief Executive Officer Claude Mongeau in a prepared statement.

As a result of its “favorable” first-quarter results and the assumption of a stronger economic recovery going forward, CN has revised its 2010 earnings estimate, aiming for solid double-digit growth.

“Our team is building momentum. We are focused on operational excellence to drive network velocity and to innovate on the service front,” said Mongeau. “If the economy continues on its recovery trend, increased traffic levels and solid execution should help CN produce strong financial results for its shareholders in 2010 and beyond.”