But CN, Canada's biggest railway, did not raise its earnings guidance for the full year saying it was "comfortable" with a raised forecast it gave in July.
"I think we are very well positioned to finish the year on a solid note," Claude Mongeau, CN's president and chief executive, told a conference call.
"We did not feel changing our guidance was necessary. As long as the economy holds up and we continue to deliver we should finish on a strong note."
CN raised its earnings outlook for 2010 in July saying it expects adjusted earnings per share will be 25 percent above the C$3.24 it reported for 2009.
Mongeau said there might be some "wiggle room" around the 25 percent increase.
CN has also forecast free cash flow of C$1.1 billion for the full year.
CN said net income rose to C$556 million ($545 million), or C$1.19 a diluted share, in the third quarter on the back of higher freight volumes as the economy picked up steam in North America as well as globally.
That was was up from C$461 million, or 97 Canadian cents a share, in the same period a year earlier and ahead of analysts' expectations of C$1.13 a share, according to Thomson Reuters I/B/E/S.
Third-quarter revenue was C$2.1 billion, up 15 percent, helped by higher freight rates, a higher fuel surcharge and stronger rail volumes.
That was bang in line with analysts' expectations.
A strong Canadian dollar versus the U.S. dollar dampened CN's revenue in the United States, where it also has tracks.
The railway said operating ratio improved by 2 points to 60.7 percent.
The increase in CN's earnings was "more than an economic recovery story", Mongeau said.
"We are starting to see dividends from our new supply chain initiatives, which are designed to help our customers grow their business and position CN to handle a greater amount of that traffic," Mongeau said in a statement.
CN has signed a number of collaboration agreements this year with Canada's major ports, sealed pacts with terminal operators to improve service levels, and also instituted scheduled grain service in Western Canada.
CN announced that its Board of Directors has approved a fourth-quarter 2010 dividend on the Company's common shares outstanding. A quarterly dividend of 27 cents (C$0.27) per common share will be paid on Dec. 31, 2010, to shareholders of record at the close of business on Dec. 10, 2010. (Reuters)
