Canadian National Railway Co (CNR.TO) reported a 2 per cent rise in quarterly revenue on Tuesday as the railroad moved higher volumes of Canadian grains and U.S. soybeans, refined petroleum products, finished vehicles and petroleum coke.

Canada's largest railroad company said net income rose to $1.02 billion, or $1.32 per share, in the fourth quarter ended Dec. 31 from $941 million, $1.18 per share, a year earlier.

Quarterly revenue rose to $3.22 billion from $3.17 billion.

In 2017, CN expects to deliver earnings per share growth in the mid-single-digit range compared with adjusted diluted earnings per share of $4.59 in 2016.

"Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017," chief executive Luc Jobin said in a statement.

Montreal-headquartered CN also approved a 10 per cent increase to CN's 2017 quarterly cash dividend.

Revenues for 2016 dropped five per cent, weighed by declines in coal, metals and minerals, along with petroleum and chemicals.

Canadian National said its 2016 operating ratio, a key metric, improved to 55.9 per cent, compared with 58.2 per cent a year earlier. The lower the ratio, which measures operating costs as a per centage of revenue, the more efficient the railroad.

CN reported adjusted quarterly earnings of $1.23 per share on revenues of $3.22 billion.

Analysts, on average, had expected earnings of $1.21 per share on revenues of $3.24 billion according to Thomson Reuters I/B/E/S.