CALGARY -- Canadian Pacific Railway reported a third-quarter profit of $347 million on Wednesday, topping its result a year ago, but falling short of investors' expectations.

The profit amounted to $2.34 per diluted share for the quarter ended Sept. 30 compared with a profit of $323 million or $2.04 per diluted share in the same period last year when it had more shares outstanding.

On an adjusted basis, CP Rail said it earned $2.73 per diluted share for the quarter, up from $2.69 a year ago.

Analysts had expected a profit of $2.79 per share, according to data compiled by Thomson Reuters.

For the three months ended Sept. 30, the Calgary-based railway had $1.55 billion of revenue, down from $1.71 billion last year.

Shares in the company slipped $4.07 or about two per cent to $197.24 in early trading on the Toronto Stock Exchange.

CP Rail is entangled in a dispute with some farmers who are worried that not enough of their harvest this year will be shipped because of a rail bottleneck.

Last week, the company said it was standing ready to move what's expected to be close to a record crop, but the grain wasn't ready because of a late harvest.

The railway said it had moved less Canadian grain than at this time last year or on average over the past three years but noted that it's only part of the supply chain and suggested a "score card" to track how the whole system is performing..

Chief executive Hunter Harrison said Wednesday that Canadian Pacific's earnings growth for 2016 will be a "mid single digit" because of the delayed grain harvest, smaller volumes of crude oil and the impact of a stronger Canadian dollar.

"While disappointed that we will not meet our previous forecast, I am incredibly proud that despite these challenges, CP will deliver its lowest-ever annual operating ratio," Harrison said in a statement.

Since Harrison became CEO, Canadian Pacific's operating ratio has fallen dramatically -- indicating a smaller percentage of revenue is required to operate the company.

In the third quarter, CP's operating ratio was 57.7 per cent. That was above last year's third-quarter operating ratio of 55.9 per cent, which was unusually low.

On an adjusted basis, the 2015 third quarter operation ratio would have been 59.9 per cent without the impact of the D&H South sale.