Northrop Grumman [NOC] on Thursday reported higher earnings in its fourth quarter due largely to a pension benefit while sales fell 15 percent on the divestiture last year of its information technology services business and fewer working days compared to a year ago.

Adjusting for the sale of the IT business, including various pension and tax items, net income fell 14 percent to $948 million, $6 earnings per share (EPS), from $1.1 billion ($6.59 EPS) a year ago, missing consensus estimates by four cents a share. The bottom-line results include four fewer working days in the quarter versus the same period a year ago and a $73 million (46 cents EPS) after-tax charge on the F-35 fighter program related to labor-related impacts on production due to COVID-19 that impacted the company and its suppliers.

The company also experienced similar COVID-19 impacts when it reported third quarter 2021 results last October. So far in 2022, virus-related absenteeism is still a challenge, Kathy Warden, Northrop Grumman’s chairwoman, president and CEO, said during the company’s earnings call, adding that the impact is primarily felt in “our high-rate, high-volume production lines,” which mainly is just the F-35.

COVID-19 impacts are being felt in other business areas, but the company has been “able to mitigate them better,” she said.

Sales in the quarter of $8.6 billion were down from $10.2 billion a year ago, with 10 percent of the decline organic. The divestiture coupled with the fewer work days accounted for nearly $1.2 billion of the reduction, and Northrop Grumman also highlighted a $444 million classified equipment sale a year ago that forced a challenging comparison with the latest quarter.

Space Systems, Northrop Grumman’s fastest growing segment, was the only operating sector to increase sales in the quarter, largely due to the rampup in development work on the Ground-Based Strategic Deterrent ICBM, the Next-Generation Interceptor missile defense program, and classified space work.

Free cash flow in the quarter, adjusted for items related to the IT business divestiture, was $906 million and for the year $3.1 billion. Northrop Grumman returned $4.7 billion to shareholders in 2021, aided in part by proceeds from the sale of the IT business, which is now part of Peraton.

The company on Thursday also announced a new $2 billion share repurchase authorization, bringing the total authorization to $4.2 billion. Warden said the company will spend at least $1.5 billion this year on its stock.

Northrop Grumman is forecasting transaction adjusted free cash flow in 2022 of between $2.5 billion and $2.8 billion, growing to about $3.3 billion in 2024.

Overall, in 2021 sales dipped 3 percent to $35.7 billion from $36.8 billion in 2020, with the divestiture accounting for $2.2 billion in lost revenue. Organic sales were up 3 percent on gains at the Space and Mission Systems segments.

Net income for the year more than doubled to $7 billion ($43.54 EPS) from $3.2 billion ($19.03 EPS) in 2020 and adjusted earnings were essentially flat at $4.1 billion ($25.63 EPS) versus $4 billion ($23.65).

Orders in the quarter were strong at $9.8 billion and for the year totaled $32.1 billion, and backlog at the end of 2021 stood at $76 billion, down 6 percent from $81 billion a year ago.

For 2022, Northrop Grumman expects sales of between $36.2 billion and $36.6 billion, representing 2 to 3 percent organic growth, with the drivers being Space Systems followed by Mission Systems. Space Systems is on its way to becoming the company’s largest segment.

Adjusted earnings in 2022 are projected to be between $24.50 and $25.10 EPS with a combination of pension headwinds and corporate expenses accounting for the majority of the decline versus 2021, partially offset by stronger operating performance.

Last year, Northrop Grumman exited an aging and surveillance contract that supports the testing of cluster munitions, part of a portfolio review aimed at shoring up the company’s environmental, social and corporate governance commitments. Warden said on Thursday that Northrop Grumman has also decided to transition out of its prime contracting role for depleted uranium ammunition once it completed a final one-year contract.

Depleted uranium is a concern due to potential long-term health effects from exposure to toxic chemical and radioactive elements.