Northrop Grumman [NOC] on Thursday reported a strong open to 2021, delivering higher sales and net income, buoyed in part by the divestiture in January of its information technology services business and top and bottom-line improvements in three of its four operating segments.

The strong quarter led the company to increase guidance for sales and earnings.

Net income in the first quarter soared 153 percent to $2.2 billion, $13.43 earnings per share (EPS), from $868 million ($5.15 EPS) a year ago, driven largely by a $1.1 billion ($6.86 EPS) gain on the sale of the IT services business to Veritas. Excluding the one-time benefit, adjusted net income was still up a handsome 24 percent to $1.1 billion ($6.57 EPS), beating consensus estimates by $1.09 per share.

Improvements to the adjusted earnings were driven largely at the segment level by higher sales, better performance and lower overhead rates, which the company attributed to lower pension costs and cost management, earnings from the equity markets, lower state taxes and amortization expenses.

Sales increased 6 percent to $9.2 billion from $8.6 billion a year ago. Reduced revenue related to the sale of the IT business was more than offset by three extra working days in the quarter.

At the operating level, the Space Systems, the company’s fastest growing segment, led the strong results with sales and operating earnings up 29 and 37 percent respectively on the Ground Based Strategic Deterrent, hypersonic programs, classified work, NASA’s Artemis human spaceflight program and the Next-Generation Overhead Persistent Infrared Radar satellite program, and lower overhead rates.

Mission Systems and Aeronautics Systems also delivered strong results on a wide variety of programs including airborne radar, land and maritime systems, targeting and navigation programs, electronic warfare, classified manned aircraft, and the E-2 and F-35 aircraft production programs.

The company’s segment operating margin was a robust 12 percent, up 80 basis points from a year ago.

Orders in the quarter were $8.9 billion and backlog at the end of March stood at $79.3 billion, down 2 percent from $81 billion at the end of 2020.

With the strong results so far, Northrop Grumman increased its sales forecast for 2021 by $200 million over the prior range to between $35.3 billion and $35.7 billion, and raised adjusted earnings guidance by 85 cents per share to between $24 and $24.50 EPS. The outlook for free cash flow remains intact at between $3 billion and $3.3 billion.

Free cash flow in the quarter was a $232 million outflow, still $1 billion better than a year ago.

Kathy Warden, Northrop Grumman’s chairman, president and CEO, on the company’s earnings call reiterated the company’s plans this year to continue to invest in innovation and affordability, and repurchase at least another $1 billion of its stock after completing a $2 billion accelerated share repurchase in the first quarter.

Over the next two years, the company expects to “return the majority of our free cash flow to our shareholders through share repurchases and dividends,” she said.