OptumHealth, a part of UnitedHealth Group Inc. (UNH) will acquire Logistics Health Inc., a La Crosse-based health care solutions provider, as reported by The Business Journal. The transaction is expected to close in the second quarter of 2011, pending antitrust review by the federal government.
OptumHealth serves approximately 60 million individuals with its diversified offering of health, financial and ancillary benefit services and products that assist consumers in navigating the health care system and accessing services, support their emotional health, provide ancillary insurance benefits and facilitate the financing of health care services through account-based programs. The segment contributed 6% to the total revenue in 2010.
Logistics Health, which provides health care support services such as medical readiness exams, occupational health services and secure data management, compliments services provided by OptumHealth.
Revenue in 2010 at Optumhealth grossed $ 5.8 million, increasing 6% year over year, largely driven by new business development in large scale public sector programs and increased sales of benefits and services to external employer markets. We expect the addition of Logistics Health to its portfolio will help it to register higher revenues going forward.
In its earnings conference call, Unitedhealth guided its 2011 revenues to gross $ 100 billion, and earnings in the range of $ 3.50 to $ 3.70 per share.
Over the last 7 days, none of the analysts covering the stock revised their estimate for the first quarter of 2011. However, over the last 30 days, 2 out of 20 analysts covering the stock raised the estimate while none lowered the same.
Over the last 7 days as well as 30 days none of the analysts covering the stock revised the estimates for 2011. For 2012, over the last 30 days, 1 out of 22 analysts covering the stock nudged the estimate downward. None of them inched up the estimate for 2012.
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. (AET) and WellPoint Inc. (WLP).
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