By Mike Stone
(Reuters) -Defense contractor Northrop Grumman Corp (NYSE:NOC) raised its full-year forecast on Thursday and beat quarterly estimates, propped up by high demand at its fast-growing space unit.
The company's space systems unit reported a 34% jump in quarterly sales, as countries ramp up investment in space exploration and satellite based sensors. Earlier this month, Northrop won a contract worth $935 million to develop living quarters for NASA's planned outpost in the lunar orbit.
Fresh support for the defense industry came last week when the Democrat-controlled U.S. Senate's Armed Services Committee rolled out a draft of its 2022 defense budget which boosted spending by $25 billion, potentially benefiting defense companies including Northrop, and signaling defense spending could rise under President Joe Biden.
The United States is modernizing its military in an effort to deter Russia and China, which is likely to boost the company's balance sheet.
Analysts say Northrop's B-21 bomber and GBSD intercontinental ballistic missiles are likely to be the backbone for the company's growth over the next decade.
Northrop now expects full-year adjusted earnings per share between $24.40 and $24.80, up from its prior range of $24 and $24.50.
The Virginia-based company expects full-year sales to be between $35.8 billion and $36.2 billion, above its previous forecast of $35.3 billion and $35.7 billion.
Adjusted net earnings of $6.42 per share beat analysts' estimate of $5.84 in the second quarter ended June 30. Total sales of $9.15 billion also toppled estimates, according to IBES data from Refinitiv.