Humana profit soars 57 percent

By Lewis Krauskopf

NEW YORK (Reuters) - Health insurer Humana Inc (HUM.N: Quote, Profile, Research, Stock Buzz) said on Monday fourth-quarter profit soared 57 percent, beating Wall Street's expectations, on strength in its Medicare plans for older Americans and a lower tax rate.

A key profitability ratio also came in better than some analysts expected, in contrast to earlier reports this quarter from the two largest U.S. health insurers, UnitedHealth Group Inc (UNH.N: Quote, Profile, Research, Stock Buzz) and WellPoint Inc (WLP.N: Quote, Profile, Research, Stock Buzz).

Net income at Humana rose to $243.2 million, or $1.43 per share, from $155 million, or 92 cents per share, a year earlier.

Analysts on average had expected $1.32 per share, according to Reuters Estimates.

Revenue at the Louisville, Kentucky-based company, one of the largest U.S. providers of Medicare plans, increased 12 percent to $6.34 billion.

"While a lower tax rate drove most of the (fourth-quarter) upside, the results appear overall high quality," Goldman Sachs analyst Matthew Borsch wrote in a research note.

Humana shares rose 16 cents to $82 in pre-market trade. They have risen 48 percent since the start of 2007, outpacing a 5 percent rise for the S&P Managed Healthcare index , which includes the six largest U.S. health insurers.

Humana has capitalized on a major expansion of Medicare, the U.S. government health insurance program for older Americans and the disabled. For full-year 2007, net income rose 71 percent to $833.7 million.