* Q1 EPS C$0.59 vs consensus estimate C$0.51
* Revenue up 5.2 pct to C$1.17 billion (Adds details, quotes from conference call, analyst's comments)
By John McCrank
TORONTO, April 28 (Reuters) - Canadian Pacific Railway Ltd (CP.TO) reported a 74 percent jump in quarterly profit on Wednesday as cost cuts and higher freight volumes pushed its results above analysts' expectations and sent its shares up 5 percent.
An improving economy meant a big increase in shipments of bulk commodities such as potash and grain, as well as automobiles, in the first quarter, CP, Canada's second biggest railway, said.
Chief Executive Fred Green said higher volumes have continued into the current quarter, but he was cautious about predicting how the economic recovery would unfold.
"Am I delighted with the speed of the bulk recovery? You bet. We had no way to predict that," Green said on a conference call with analysts. "The issue that we all face is simply the sustainability of the demand. Will it be volatile? I would guess it probably will be a bit more volatile than history says."
CP earned C$99.8 million ($98.4 million), or 59 Canadian cents a share, in the period ended March 31. That compared with a profit of C$57.3 million, or 36 Canadian cents a share, in the year-earlier quarter.
Revenue at the railway, which has operations in Canada and the northern United States, rose 5.2 percent to C$1.17 billion.
Industry analysts, on average, had expected earnings of 51 Canadian cents a share, according to Thomson Reuters I/B/E/S. The average revenue forecast was C$1.13 billion.
"They had the lowest revenue growth of all the Class 1 railroads, but the biggest improvement in operating ratio, so hence they had the largest increase in earnings per share growth year over year and quite substantial growth," said David Newman, an analyst at National Bank Financial.
Canada's biggest railroad, Canadian National Railway (CNR.TO), reported its results on Monday and its earnings handily beat analysts' expectations. [ID:nN21222356]
Both Canadian railways benefited from a mild Canadian winter that cut maintenance and operating costs.
Newman said CP was able to reduce costs for services, materials and equipment, while keeping head count at reasonable levels
"So when volumes continue to surge, certainly towards the back half of the year and especially when the strong Canadian dollar eases to a certain degree and you start to have flat year over year comparables on (foreign exchange), I think we're going to have a very very strong year for railroading."
Shares of CP were up C$2.88, or 5 percent, at C$61.00 on the Toronto Stock Exchange on Wednesday afternoon.
Newman has an "outperform" rating on a stock with a price target of C$69.00.
RBC Dominion Securities analyst Walter Spracklin, who also rates the stock outperform, said in a note to clients that he expects "substantial upwards earnings revisions on the back of these results."
CP holds an investors' day on June 1.
$1=$1.01 Canadian Additional reporting by Scott Anderson; editing by Peter Galloway