CHICAGO, June 28, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: UnitedHealth Group Inc. (NYSE:
UNH), Humana Inc. (NYSE: HUM), Aetna Inc. (NYSE:
AET), WellPoint Inc. (NYSE: WLP) and Sears Holdings
Corporation (NASDAQ: SHLD).
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Here are highlights from Monday's Analyst Blog:
UnitedHealth Takes DoD to Court
UnitedHealth Takes DoD to Court UnitedHealthcare, a division of
UnitedHealth Group Inc. (NYSE: UNH) sued the U.S. Department
of Defense (DoD) in the U.S. Court of Federal Claims after it lost
the $23.5 billion 5-year Tricare
South contract to Humana Inc. (NYSE: HUM).
The Tricare South contract covers 3 million military members and
their families in 11 southern states. In July 2009, UnitedHealth won the contract form
Humana. But after continuous protests by Humana, DoD reviewed its
decision and awarded the $23.5
billion 5-year contract to Humana in February 2011.
Updating the TRICARE West Region contract, earlier, in
April 2011, DoD invited fresh bids
for TRICARE West Region contract after UnitedHealthcare's Military
& Veterans business raised an objection. As such, UnitedHealth
will get another chance to win a $17
billion contract to provide health benefits to soldiers in
21 western states, including Minnesota.
Together, the two contracts would have net more than
$40 billion over six years, including
a handsome management fees.
UnitedHealth Group reported first quarter 2011 net earnings of
$1.22 per share, well ahead of the
Zacks Consensus Estimate as well as year-ago earnings, aided by
strong revenue growth from UnitedHealthcare as well as Optum.
At its earnings conference call, the company guided its 2011
revenues to gross $101 billion and
earnings in the range of $3.95 to
$4.05 per share.
The Zacks Consensus Estimate for first-quarter 2011 is
93 cents per share. For full years
2011 and 2012, the Zacks Consensus Estimates are, respectively,
$4.19 and $4.65.
We maintain a Neutral recommendation on UnitedHealth Group over
the long term. The quantitative Zacks #3 Rank (short-term Hold
rating) for the company indicates no clear directional pressure on
the stock over the near term.
Headquartered in Minnesota,
UnitedHealth Group Inc. through its diversified businesses,
leverages core competencies in advanced technology-based
transactional capabilities; health care data, knowledge and
information; and health care resource organization and care
facilitation to improve access to health and well-being services,
simplify the medical experience, promote quality and make health
care more affordable. It competes with Aetna Inc. (NYSE:
AET) and WellPoint Inc. (NYSE: WLP).
Sears Spins Off Hardware Chain
Sears Spins Off Hardware Chain Sears Holdings Corporation
(NASDAQ: SHLD) declared that it is spinning off its hardware chain,
Orchard Supply Hardware Stores, after five continuous years of bad
performance. Sears believes that Orchard Supply will perform way
far better and yield good returns to its shareholders as a
separate, publicly traded company. Orchard Supply was originally
founded in 1931 as a farmer-run purchasing co-op in San Jose, Calif., and was bought by Sears,
Roebuck in 1989.
The hardware chain, which has 89 stores in California, will have 80% of its shares owned
by Sears shareholders and the remaining 20% will be held by Ares
Management LLC. Orchards shares will not be directly available to
the public but through Sears shareholders who will trade them on
the open market. Sears has filed a Registration Statement on Form
S-1 with the Securities and Exchange Commission for the
spin-off.
Sears Holdings Corp. is the fourth largest broadline retailer in
the U.S. and offers home appliances, tools, lawn and garden
equipment, electronics, automotive repair and maintenance products
through a countrywide network of over 4,000 retail stores.
Moreover, the company is the largest home services provider in
the United States, with over 11
million service calls made annually.
The company disappointed the Street with its overall
first-quarter 2011 results. Sears Holdings reported an adjusted
loss of $1.39 per share, compared
with the Zacks Consensus Estimate of a loss of $1.22, and a drastic plunge from the prior-year
quarter earnings of 16 cents per
share, primarily due to the sluggish top-line performance.
Management's cost-cutting measures for enhancing profits were
largely criticized as improving the merchandise mix and customer
service would have been a better option.
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