Canadian National Railway Company’s CNI first-quarter 2016 earnings of C$1.00 per share (73 cents) beat the Zacks Consensus Estimate by 4 cents. Earnings also beat the year-ago figure by 4.3%. The bottom-line performance was boosted by lower operating expenses.The company, however, cut a sorry figure with regard to the top-line performance. Quarterly revenues of C$2,964 million (approximately $2,159 million) fell short of the Zacks Consensus Estimate of $2,290 million. Moreover, the top line deteriorated on a year-over-year basis with rail freight revenues, which accounted for 96% of the top line in the quarter, contracting 5%. Canadian National’s top line suffered mainly because of weak coal revenues and energy markets, as has been the case with other railroad operators.On a year-over-year basis, freight revenues decreased 42% at the coal segment, 10% at Petroleum and Chemicals, 18% at Metals and Minerals, and 2% at the Grain and Fertilizers unit. On the other hand, freight revenues increased 18%, 11% and 1% at the Automotive, Forest products and Intermodal divisions, respectively. Carloads (volumes) dropped 7% and revenue ton miles (RTMs) fell 9% year over year.In the quarter under review, operating income climbed 14% year over year to C$1,217 million. Operating ratio (defined as operating expenses as a percentage of revenues) was 58.9% versus 65.7% in the year-ago quarter.Canadian National exited the first quarter of 2016 with free cash flow of C$584 million, up approximately 12.1% year over year. Adjusted debt at the end of the first quarter of 2016 was C$10,715 million versus C$10,010 million a year ago. The company also declared a quarterly dividend of C$0.375 which will be paid on Jun 30, 2016, to shareholders on record as of Jun 9.Annual GuidanceApart from releasing first quarter results, the company trimmed its earnings per share outlook for 2016. Following the guidance cut, Canadian National expects earnings per share to remain flat on a year-over-year basis in 2016. The company reported earnings of C$4.44 per share in 2015. The previous outlook had called for a mid-single digit growth earnings per share in 2016 over 2015 levels. The Montreal-based company cited softer-than-expected freight demand in some markets coupled with the strengthening of the Canadian dollar versus its U.S. counterpart as the factors behind the trimmed outlook. Meanwhile, following the slashed guidance, shares of the company fell 5.29% in after-market trading on Apr 25.Zacks Rank & Other Key PicksCanadian National currently sports a Zacks Rank#1 (Strong Buy). Investors interested in the transportation space may also consider Canadian Pacific Railway Limited CP, Student Transportation STB and International Consolidated Airlines Group S.A. ICAGY. All the three stocks carry the same Zacks Rank as Canadian National. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report INTL CONS AIRLN (ICAGY): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report STUDENT TRANSPT (STB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research