Canadian Pacific Railway Ltd. says it will increase its next quarterly dividend by 3 cents to 30 cents per share, reflecting a positive long-term outlook.

"With the growing demand in our bulk and energy franchises, we feel positive about the long-term fundamentals of our business," chief financial officer Kathryn McQuade said Wednesday in a statement.

The increased dividend will be payable on July 25 to shareholders of record on June 24, the Calgary-based railway company said.

Based on the company's share price Wednesday, they will have an annual yield of nearly 2 per cent.

Canadian Pacific carries coal, fertilizer, grain, automobiles, consumer goods and other materials across its vast North American network. As such, it is often considered a bellwether for the state of the general economy.

The company reported last month that its bottom line was hit by particularly nasty winter weather and warned that spring flooding may present further challenges.

The railway's profit during the first three months of 2011 fell to $33.7-million, a steep decline from the $101-million it reported a year earlier. Revenue declined slightly to $1.16-billion from $1.17-billion.