NOC Northrop Grumman Corp Holding Co

Northrop Grumman Corp. posted Wednesday better-than-expect quarterly results after capturing a hotly sought after government contract to build long-range bombers for the Air Force.

The Pentagon on Tuesday announced the contract valued at more than $20 billion. Northrop Grumman was selected over a Boeing Co. and Lockheed Martin Corp. team to build the first 21 jets to replace aging B-52 and B-1 warplanes.

On Wednesday, Northrop raised its earnings per share forecast for the year to a range of $9.70 and $9.80 from a previous prediction of $9.55 to $9.70. The company also raised the low end of its sales forecast, now projecting a range of $23.6 billion to $23.8 billion, compared with $23.4 billion to $23.8 billion.

Northrop has been one of the defense industry's top performers, with share prices tripling since 2013 when it launched a buyback effort. For the latest quarter, Northrop repurchased 5.6 million shares for $944 million, bringing the total for the year so far to 17.7 million shares for $2.9 billion.

Investors had increasingly viewed Northrop's prospects as tied to the outcome of the award by the Air Force of the contract to build the new long-range bomber. On Wednesday, shares of the company rose 6.4% to $192.15 in premarket trading.

Northrop has a big role in the Lockheed-led F-35 fighter, drones and satellite systems, and plans to shrink to three from four business units, combining parts of existing operations into a single mission systems segment.

Beefed-up aerospace and technical-services units complete the revamped lineup, which Northrop said would help it enhance innovation.

The company's moves come as senior Pentagon officials have in recent months been highly critical of established defense contractors' ability to meet the challenge of more sophisticated weapons systems being developed by China and Russia.

Overall, the company posted a profit of $516 million, or $2.75 a share, up from $473 million, or $2.26 a share, a year earlier. Adjusted for pension-related costs, per-share earnings rose to $2.41 from $2.32.

Revenue slipped to $5.979 billion from $5.984 billion.

Analysts surveyed by Thomson Reuters forecast per-share earnings of $2.19 on revenue of $5.86 billion.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

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(END) Dow Jones Newswires

October 28, 2015 08:25 ET (12:25 GMT)

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