Railroad operator Canadian Pacific Railway Ltd (CP.TO) reported a better-than-expected quarterly profit on higher shipments and raised its full-year profit forecast.

CP now expects 2017 adjusted earnings to grow at double-digit percentage. It had previously expected high single-digit percentage growth.

The company's net income rose to $510 million, or $3.50 per share, in the third quarter ended Sept. 30, from $347 million, or $2.34 per share, a year earlier.

"Volume momentum grew over the course of the quarter, setting us up for a strong finish to the year," chief executive Keith Creel said.

CP reported an operating ratio - operating costs as a percentage of revenue - of 56.7 per cent, down from 57.7 per cent, a year earlier. The lower the ratio, the more efficient the railroad.

Excluding items, the company earned $2.90 per share, ahead of analysts' average estimate of $2.87, according to Thomson Reuters. The Calgary-based company's total revenue rose to $1.60 billion from $1.55 billion.

Revenue from grain shipments, the biggest contributor to the company's revenue, fell nearly 6 per cent to $351 million in the quarter.