Canadian Pacific Railway Ltd reported stronger-than-expected results on Thursday, and said rising freight volumes and prices should push already record results to new highs later this year. The shares of the Calgary-based railway, which have risen some 20 percent since its last quarterly report, surged as much as 4.7 percent on the news. “I could more characterize the quarter as record after record after record,” Chief Executive Officer Hunter Harrison told analysts. “Looking at the balance of 2014, we see strong fundamentals on the demand side.” Growth in the burgeoning crude-by-rail business could potentially ramp up to a train a day by the fourth quarter, executives said. The results came even as North American railroads grappled with the fall-out from one of the harshest winters in decades. CP said rail congestion around Chicago and delays along the Minneapolis/St. Paul corridor were still an issue. CP and larger rival Canadian National Railway were also under significant pressure during the first half of the year to clear the backlog from a record grain harvest while dealing with service disruptions caused by the winter weather. Despite these challenges, Calgary-based CP said its operating ratio improved by 680 basis points to 65.1 percent. Operating ratio is a key measure of railroad efficiency. The lower the number the better. CEO Harrison, a rail veteran, has been orchestrating a major turnaround at CP, a former industry laggard, and had promised to squeeze the railway’s operating ratio to 65 percent by mid-2016. Harrison has since said 63 percent could be possible this year. “While consensus moved lower in the last month due to grain yield, operating and stock based compensation concerns, operating results appear to have eclipsed the ... level consensus moved from,” Citigroup Global Markets analyst, Christian Wetherbee, said in a note to clients. The Calgary-based company reported net income of C$371 million ($345.24 million), or C$2.11 a share, up from C$252 million, or C$1.43 a share, a year earlier. Profits were up even after the company recorded a roughly C$30 million increase in stock-based compensation. Record grain shipment volumes accounted for large chunk of the railroad’s 12 percent growth in revenue, which hit C$1.68 billion during the quarter. Energy-related traffic, such as crude and sand used in oil and gas fracking, was another source of substantial revenue growth, CP said. On average, analysts expected earnings of C$2.09 per share and revenue of C$1.65 billion, according to Thomson Reuters I/B/E/S. “Second-quarter performance was strong with continued improvement in train length, train weight, fuel efficiency,” said President Keith Creel, who also noted that accidents were down 47 percent during the quarter. Operating income rose by 40 percent, to C$587 million, and operating expenses edged up 2 percent to C$1.09 billion.