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UnitedHealth profit beats estimate on higher premium revenue

UnitedHealth, the largest U.S. health insurer, reported a better-than-expected fourth-quarter profit as premium income rose.

The company's premium revenue rose 6 percent to $29.38 billion in the quarter ended Dec. 31, while overall medical cost trends remained well in control, with decreased inpatient hospital usage per person, the company said.

UnitedHealth's shares were up 2.2 percent in premarket trading.

The company reported a medical care ratio, or the amount it spends on medical claims compared with the insurance premiums that it brings in, of 79.8 percent. It was 81.2 percent a year earlier.

The fourth quarter can be difficult to predict for insurers because medical use often increases in the quarter as individuals reach the health insurance deductible level at which point the insurer begins to pay more of their medical costs.

Health insurers have faced many changes during the past few years as the national healthcare reform law went into effect. The law has brought higher fees and taxes for insurers and has also created a new individual healthcare insurance market and expanded the ranks of Medicaid, which has helped increase revenue.

UnitedHealth also said it sees 2015 revenue at between $140.5 billion and $141.5 billion and net earnings in the range of $6 to $6.25 per share.

Analyst's were expecting 2015 net earnings of $6.17 per share on revenue of $140.90 billion, according to Thomson Reuters I/B/E/S.

The company's earnings rose to $1.5 billion, or $1.55 per share, in the quarter ended Dec. 31, from $1.4 billion, or $1.41 per share, a year earlier.

Revenue rose about 7 percent to $33.43 billion.

Analysts had expected a profit of $1.50 per share and revenue of $33.11 billion.