The Montreal-based company reported its adjusted net income rose to C$1.09 billion in the three months ended December 31, up from C$897 million a year earlier.
The railroad said it earned C$1.49 per share, beating analysts’ average estimates of C$1.47.
Fourth-quarter revenue jumped nearly 16% to C$3.81 billion from C$3.29 billion.
"I'm very pleased with our fourth quarter results and the strong finish to 2018," said J.J. Ruest, president and CEO of CN Rail in a statement. "With approximately C$1.3 billion of revenue growth in the final three quarters of the year, CN regained its position of strength and demonstrated again its ability to grow at low incremental cost. 2019 will be a year of building on this momentum."
On Tuesday, the railway approved an 18% increase to its quarterly cash dividend and announced a stock buyback of up to 22 million shares.
"We are focused on operational productivity and services that resonate with customers," said Ruest. "In 2019, our record capital program of $3.9 billion will be focused on investing in the renewal of a more efficient and reliable locomotive fleet, adding network capacity to accommodate our solid pipeline of growth in diverse markets and bringing technology to our precision scheduled railroading."
Shares of CN rail were down 0.05% at C$110.43 on Tuesday.