CN’s 2Q15 EPS of $1.15/share beat consensus ($1.05/share) and our $1.03/share forecast. Revenues were down in three of seven business lines and down 0.5% overall, but CN cut operating costs by 5% and posted a record operating ratio of 56.4%. By posting a record operating ratio despite a decline in revenues, CN has demonstrated that it can cut costs rapidly in a contracting business environment.