NEW YORK (TheStreet) -- Shares of Lockheed Martin (LMT - Get Report) were dropping mid-Tuesday afternoon after the company said its recent $4.6 billion spin-off of its IT division to Leidos Holdings (LDOS) would yield a smaller-than-expected boost to its earnings, Bloomberg reports.
On Tuesday, Lockheed repurchased 9.4 million shares of its stock in a tax-free transaction, according to a company statement. Investors were looking for the company to retire 10 million shares.
The lower-than-expected repurchase indicates that the Leidos deal will provide less of a lift to the Bethesda, MD-based defense contractor's earnings on a per-share basis, according to analysts at Stifel Nicolaus.
Leidos paid $1.8 billion in cash and an additional $2.8 billion in common stock to Lockheed shareholders for the unit.
The merger closed on Tuesday.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of A+.
The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
You can view the full analysis from the report here: LMT