Canadian National Railway Co (CNR.TO) reported better-than-expected quarterly profit and revenue on Tuesday, as the railroad moved higher volumes of commodities including Canadian grains and fertilizers.

Northern American railroad operators' results are being lifted this year by higher volumes because of improving economic conditions.

CN chief executive Luc Jobin said on a call with analysts that he expects volume growth during the second half of the year, despite tougher comparable figures from the fourth quarter of 2016. CN expects 10-per-cent growth in 2017 revenue ton-mile (RTM), which measures the relative weight and distance of freight transported by a railroad.

"It's a lot of volume coming at us," CN chief financial officer Ghislain Houle said on the call.

CN, which added 540 people between the first three months of 2017 and the end of the second quarter, will continue hiring and investing to support its intermodal and other businesses, Houle said.

During the fourth quarter, CN chief marketing officer Jean-Jacques Ruest said he was not yet sure how well volumes of U.S. coal and grains would perform.

"The fourth quarter question mark is on the bulk side," Ruest told analysts.

CN reaffirmed 2017 adjusted earnings per share of $4.95 to $5.10, despite headwinds posed by the rising loonie, which traded at 80 cents US this week, a 14-month high.

CN earns what the company calls a "large portion" of its revenue in U.S. dollars, which has less value as the loonie rises.

Smaller rival Canadian Pacific Railway (CP.TO) last week reported a better-than-expected quarterly profit as it earned more from higher shipments of commodities.

CN said total carloads, the amount of freight loaded into freight cars during a specified period, rose 14 per cent, while rail freight revenue per carload increased three per cent.

The railway's operating ratio, a key measure of efficiency, increased to 55.1 per cent from 54.5 per cent a year earlier. The lower the ratio, which measures operating costs as a percentage of revenue, the more efficient the railroad.

Canada's largest railroad company said net income rose to $1.03 billion, or $1.36 per share, in the second quarter ended June 30 from $858 million, $1.10 per share, a year earlier.

Excluding items, the company earned $1.34 per share, slightly ahead of analysts' average estimate of $1.32, according to Thomson Reuters I/B/E/S.

Revenue rose 17 per cent to $3.33 billion, beating analysts' average estimate of $3.27 billion.