Canada’s largest railway company announced record third quarter profits this week despite lower freight volumes.

Canadian National Railway reported net profits of $1 billion in the three month period ending Sept. 30, up 18 percent from the same period in 2014.

Third quarter revenues were $3.22 billion compared to $3.12 billion in the third quarter of 2014.

CN said it is still on track to meet double digit earnings-per-share growth targets this year, despite lower third quarter freight volumes.

Reduced fuel costs and beneficial foreign exchange rates relative to the Canadian dollar helped boost profits and reduce the railway’s operating ratio to a record low 53.8 percent.

Operating ratio is a measure of a railway’s operating efficiency. The lower the ratio, the more efficient the operation.

“We continue to be confident in terms of CN’s prospects for the year, notwithstanding the fact that we’re experiencing weaker conditions than expected in some markets,” company executive J.J. Ruest said during an Oct. 27 conference call with investors.

The company reported lower carload numbers in several key business sectors including grain, coal, petroleum and chemicals and minerals.

However, increased freight revenues per carload on commodities other than grain offset lower volumes.

Third quarter grain volumes were down seven percent from the third quarter of 2014,  coal carloads were down 10 percent, petroleum and chemicals were down four percent and metal and mineral carloads were down 25 percent.

The company saw a 10 percent drop in Canadian grain revenue because of low grain stocks and a delayed Canadian harvest.

Officials said the company’s “Canadian grain business is now running flat out,” and demand should remain strong in the fourth quarter.

Contact brian.cross@producer.com