Hydro One Ltd. topped expectations as it reported its fourth-quarter profit was up more than 20 per cent compared with a year ago.

The parent company of Ontario's largest electricity transmission and distribution utility says it earned a profit attributable to common shareholders of $155 million or 26 cents per diluted share in the quarter ended Dec. 31.

That compared with a profit of $128 million or 21 cents per diluted share in the last three months of 2016.

On an adjusted basis, Hydro One says it earned $170 million or 28 cents per diluted share, up from $128 million or 21 cents per diluted share a year earlier.

Analysts on average had expected a profit of 25 cents per share for the quarter, according to Thomson Reuters.

Revenue totalled $1.44 billion, down from $1.61 billion, while revenue net of purchased power amounted to $777 million, up from $756 million in the same quarter in 2016.