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The board of directors of Raytheon Co. (RTN - Analyst Report) has approved a share repurchase program, whereby the company is authorized to buy back $2 billion shares.

The new authorization by Raytheon is duly supported by the company’s sturdy financial position. Cash and cash equivalents at the end of the third quarter stood at $2.9 billion while cash from operations in the first nine months totaled $1.3 billion. A sustained solid operational performance continues to cushion the company’s sturdy financial position.

Raytheon has maintained a solid track record of delivering positive earnings surprises. In the last reported quarter, it surpassed the Zacks Consensus Estimate by 13.5% on strong program execution.

Earlier in Sep 2011, the board of directors authorized Raytheon to repurchase up to $2.0 billion shares. With 10.5 million shares bought back for $675 million in the first nine months, the company is left with $670 million under its authorization as of Sep 29, 2013.

Concurrently, the board of directors also approved a quarterly dividend of 55 cents to the shareholders of record on the close of Jan 2, 2014. The dividend will be paid on Feb 4, 2014. Raytheon’s dividend yield currently stands at 2.57%, much above the industry yield of 1.73% and that of other players like L-3 Communications Holdings Inc. (LLL - Analyst Report) (2.17%), General Dynamics Corp. (GD - Analyst Report) (2.50%) and Northrop Grumman Corp. (NOC - Analyst Report) (2.22%).

There was no earnings momentum over the last 7 days. With the news of the latest buyback authorization, we expect analysts to raise their estimates for the company. Raytheon presently carries a Zacks Rank #1 (Strong Buy).

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