Northrop Grumman [NOC] on Thursday said it swung to a profit in the fourth quarter on strong sales and the company also substantially boosted its share repurchase program with plans to buy back $3 billion worth of its stock in 2021.

Net income in the quarter was $330 million, $1.97 earnings per share (EPS), versus a $409 million ($2.43 EPS) loss a year ago, which was due to adopting a change in how it accounts for pension and other post-retirement benefits. Adjusted net income was $1.1 billion ($6.59 EPS), which smashed consensus estimates of $5.76 EPS.

Sales in the quarter jumped 17 percent to $10.2 billion from $8.7 billion a year ago.

At the operating level, all four of the company’s segments posted top line increases driven mainly by Space Systems, Aeronautics Systems and Defense Systems on a range of classified work, government space programs, the new Ground Based Strategic Deterrent (GBSD) ICBM contract, and mission readiness. Northrop Grumman said Aeronautics benefited from a $444 million equipment sale to a classified customer.

Higher profits at the segment level were driven by improvements at Defense, Space, and Aeronautics on improved performance, the classified equipment sale and higher sales overall. Segment operating margin declined 90 basis points to 11.2 percent.

Northrop Grumman’s net income in the quarter also benefited from a pension tailwind and other non-operational variables.

For 2020, net income increased 31 percent to $3.2 billion ($19.03 EPS) from $2.2 billion ($13.22 EPS) a year ago, and adjusted earnings increased 10 percent to $4 billion ($23.65 EPS). Segment operating margin was 11.4 percent.

The pending sale of Northrop Grumman’s government information technology services business to Veritas Capital

is expected to close shortly and result in $2.5 billion in net proceeds for the company.

With the gains from the sale, combined with strong a strong cash position, Northrop Grumman has “the resources and flexibility to take aggressive value creating actions,” Kathy Warden, the company’s chairman, president and CEO, said on an earnings call with analysts. This includes a $3 billion addition to its share repurchase authorization to $5.8 billion with plans to plans to spend more than $3 billion this year to buy back company stock, she said.

Share repurchases will continue to be a “high-priority” for cash deployments beyond 2021, Warden added. Additional priorities for cash include investing in growth, improving the balance sheet and shareholder dividends, she said.

Free cash flow for the year was $3.7 billion.

The company adjusted its outlook for 2021 to reflect the divestiture of the IT services business, which generated $2.3 billion in sales in 2020. Sales this year are expected to range between $35.1 billion and $35.5 billion, representing organic growth of 4 percent. Warden said the GBSD program will generate between $800 million and $900 million in sales this year.

Adjusted earnings are forecast to be between $23.15 and $23.65 EPS with segment operating margin between 11.5 and 11.7 percent. Free cash flow will be between $3 billion and $3.3 billion.

Northrop Grumman tallied $9.9 billion and $52.9 billion in orders in the fourth quarter and full-year, respectively, raising backlog at the end of 2020 to $81 billion, a 25 percent increase from $64.8 billion a year ago. The company recorded $17.4 billion in classified bookings led by Space Systems with $9 billion and Aeronautics with $6 billion. The GBSD program generated $13.3 billion in orders.

Space Systems is expected to remain the company’s “fastest growing sector,” driven by the GBSD program and recapitalization of U.S. space assets, Warden said. She pointed out that funding for the Defense Department’s space efforts grew 6 percent in the fiscal year 2021 budget.

In the Aeronautics segment, the Air Force’s new B-21 stealth bomber program accounts for a significant share of sales, orders and backlog, although the company doesn’t break out specific program impacts. The first flight of a production ready B-21 is slated for mid-2022 and production of the second bomber has begun.

“The team is making tremendous progress and our partnership with the Air Force is strong,” Warden said of the B-21. “We are pleased with the maturity of the hardware and software, including recent flight testing on a surrogate test-bed. Air Force leaders say these efforts along with the team’s modern approach to digital engineering gives them a lot of confidence about the program’s path to first flight. I share this confidence.”

Asked by one analyst about the Biden administration’s pause on arms sales to the Middle East and Northrop Grumman’s exposure to “offensive” weapons here, Warden replied that “a small piece of work” is being considered but hasn’t been approved. She expects “an extensive evaluation of everything that was in the pipeline,” including work on the F-35 fighter program and the Advanced Anti-Radiation Guided Missile.

Overall, the work here is “small” for Northrop Grumman and is immaterial to financial plans, she said.