Canadian Pacific Railway (CP.TO) reported first-quarter profit that topped analysts' expectations on Wednesday as the railroad operator earned more from shipment of commodities, offsetting higher expenses.

CP's profit beat comes at a time when workers at Canada's the second largest railway notified the company of intent to strike as early as Saturday, following a stalemate in talks with the labor unions over certain demands.

Due to a surge in expenses, CP's operating ratio — operating costs as a percentage of revenue — rose to 67.5 percent for the quarter ended March 31 from 62.4 percent a year earlier. A lower ratio indicates higher efficiency.

The company's total operating expenses rose 12.3 per cent to $1.12 billion in the quarter.

CP's net income fell to $348 million or $2.41 per share, from $431 million, or $2.93 per share, a year earlier.

On an adjusted basis, the company earned $2.70 per share, beating the average analyst estimate by 2 cents, according to Thomson Reuters I/B/E/S.

The Calgary-based company's total revenue rose nearly 4 per cent to $1.66 billion.