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July 19 (Reuters) - Canadian Pacific Railway Ltd CP.TO reported a better-than-expected quarterly profit on Wednesday, as it earned more from higher shipments of commodities.
North American railroad operators, who have faced pressure from volatile commodity prices, are now beginning to see profits beat expectations, driven by higher freight volumes.
Revenue from grain shipments, which makes up the bulk of CP's total revenue, jumped 20.2 percent to C$363 million in the second quarter ended June 30.
Operating ratio, which measures operating costs as a percentage of revenue, fell 330 basis points to 58.7 percent. The lower the ratio, the more efficient a railroad becomes.
CP's net income rose to C$480 million ($381 million), or C$3.27 per share in the second quarter, from C$328 million, or C$2.15 per share, a year earlier. No.2 railway earned C$2.77 per share, beating analysts' average estimate by 5 Canadian cents, according to Thomson Reuters I/B/E/S.
The Calgary-based company's total revenue climbed 13.3 percent to C$1.64 billion, which also edged past analysts' estimates of C$1.63 billion. ($1 = 1.2591 Canadian dollars)