(Adds details in results, analysts' estimates)
April 19 (Reuters) - Canadian Pacific Railway Ltd CP.TO CP.N reported a higher-than-expected quarterly profit as it earned more from shipments of commodities such as grain and coal, and the company expressed optimism that demand was improving.
The results are the first under Chief Executive Officer Keith Creel, who officially took the reins in the middle of the quarter from veteran railroad executive Hunter Harrison.
"We turned a corner in March and are now seeing positive volumes, which makes us cautiously optimistic that the demand environment is improving," Creel said in a statement on Wednesday. American railroad operators have cut costs amid pressure from volatile commodity prices that have crimped freight volumes.
CP's net income fell to C$431 million ($320 million), or C$2.93 per share, in the first quarter ended March 31, from C$540 million, or C$3.51 per share, a year earlier.
The year-ago quarter included a gain of C$181 million from the conversion of the company's U.S. dollar-denominated debt.
Excluding items, CP earned C$2.50 per share, just beating analysts' average estimate of C$2.49 per share, according to Thomson Reuters I/B/E/S.
The Calgary-based company's total revenue inched up 0.8 percent to C$1.60 billion. Freight revenue, which comprises the lion's shares of total revenue, rose nearly 1 percent to C$1.56 billion.
The company's operating ratio, which measures operating costs as a percentage of revenue, improved to 58.1 percent from 58.9 percent a year earlier. The lower the ratio the more efficient the railroad.
CSX Corp CSX.O , the No. 3 U.S. railroad, on Wednesday reported a better-than-expected quarterly profit, driven by rising freight volumes across most of the markets it covers and said it plans to cut costs and boost profitability moving forward. ($1 = C$1.35)