The increase in earnings came despite difficulties including floods in Western Canada, forest fires and mudslides, CN Chief Executive Claude Mongeau said in a statement.
Higher freight volumes were a result of modest improvements in North American and global economic conditions, while the strong Canadian dollar versus the greenback kept the quarter's net income in check, CN said.
Canada's biggest railway said its net earnings rose to C$538 million ($566 million), with diluted earnings per share of C$1.18, in the three months to the end of June. That compared with earnings of C$534 million, or C$1.13 a share, in the same period a year earlier.
Excluding a C$40 million expense for deferred income tax, earnings per share for the quarter were C$1.26 per share.
Analysts, on average, had expected CN to report earnings of C$1.25 a share, according to ThomsonReuters I/B/E/S.
CN left its guidance for 2011 unchanged and said it expects to see its earnings per share rise by up to 15 percent on an adjusted basis. (Reuters)
