MONTREAL -- The spring thaw from the coldest winter in decades is feeding hope that Canadian National Railway, the country's largest rail company, will meet forecast earnings growth in 2014 despite weather-related challenges earlier in the year.

"If I look at April our recovery is well underway," CEO Claude Mongeau said during a conference call from Vancouver ahead of its annual meeting on Wednesday.

"Our safety, operating and service metrics...are quickly returning to pre-winter levels and that bodes well for the balance of the year."

CN's profit increased 12.2 per cent to $623 million in the first quarter despite the negative effects of a very cold and snowy winter as it beat analyst expectations on both revenue and profit.

Reporting after markets closed, CN said it earned 75 cents per share for the period ended March 31, 10 cents per share higher than last year.

Excluding gains from asset sales, CN earned $551 million or 66 cents per share, compared with $519 million or 61 cents per share in comparable prior-year period.

Revenues grew nine per cent to $2.69 billion, led by a 23 per cent gain from petroleum and chemicals. Intermodal was up 12 per cent, followed by metals and minerals (seven per cent), coal (seven per cent), and grain and fertilizers (six per cent). Forest products revenues were flat while automotive revenues declined by four per cent.

The Montreal-based railway was expected to earn 63 cent per share in adjusted profits in the first quarter on $2.64 billion of revenues, according to analysts polled by Thomson Reuters.

Mongeau said the railway delivered "solid" results despite the harshest winter in decades.

"Very, very difficult winter conditions that impacted not just railroads but all transportation sectors and it clearly impacted our ability to meet all of the customer demand that we had in front of us," he told analysts.

The railway says it likely missed out on about $100 million worth of business, much of which it expects to recoup in the coming months, adding that capital expenditures since last year's winter challenges are helping it to rebound quicker this spring.

The lower Canadian dollar increased profits by $26 million in the quarter.

The railway's shares (TSX:CNR) hit an all-time high of $63.72 in trading Tuesday on the Toronto Stock Exchange before closing at $63.57, up 59 cents.

The railway maintained its 2014 financial outlook and increased its planned capital expenditures for the year to $2.25 billion, up $150 million, to support growth, efficiency and safety.

It aims to deliver double-digit EPS growth in 2014 over the adjusted diluted EPS of C$3.06 it posted in 2013, as well as free cash flow in the range of C$1.6 billion to C$1.7 billion.

The operating ratio -- operating expenses as a percentage of revenues --deteriorated by 1.2 points to 69.6 per cent in the quarter, but was still better than Calgary-based rival Canadian Pacific Railway (TSX:CP) which reported Tuesday a ratio of 72 per cent.

Both railways have said the entire North American rail industry was affected by extreme weather in the quarter.

David Tyerman of Canaccord Genuity, for example, cut his earnings forecast for the railway by six cents per share because extreme cold and snowy conditions were expected to increase labour costs, slow trains and force them to stop longer in terminals. However, the lower Canadian dollar was expected to offset some of the impact, adding six to nine cents per share for the year.

Revenue ton-miles -- measuring the relative weight and distance of rail freight transported by CN -- increased by five per cent.

Operating expenses increased by 11 per cent to $1.87 billion, mainly due to the weaker loonie and harsh winter.

Meanwhile, Mongeau once again criticized the federal government for deciding "in the heat of the moment" to react to difficulties in moving a bumper grain crop by introducing legislation that he said would set back the country's sound transportation policy.

The federal government ordered the rail companies to increase the amount of grain they move to a minimum of one million tonnes per week or face fines of up to $100,000 per day and introduced proposed changes to the Canada Grain Act and Canada Transportation Act in an effort to clear a transportation bottleneck.

However, Mongeau said CN was moving grain in line with what elevator grain companies are able to unload.

He said he hopes other customers will step forward during the summer to challenge the government's moves, which he said gives grain a "super priority" over other shippers and allows the commodity to "jump the queue."

"I think that it's important enough for Canada that cooler heads and wiser heads will prevail in due course."