Orbital ATK [OA] on May 11 posted a decline in earnings in its first quarter despite an increase in sales, results the company said were in line with its expectations as the second half of 2017 is expected to be stronger.

Bookings were very strong, more than $1.6 billion, about 1.5 times sales, and the company reaffirmed its financial outlook.

Net income slid 14 percent to $66.5 million, $1.15 earnings per share (EPS), from $77.3 million ($1.31 EPS). Adjusted per share earnings were $1.23, 14 cents below consensus estimates, and exclude costs associated with the merger of the former Orbital Sciences and Alliant Techsystems in 2015 and costs from restating results going back to the second quarter of 2016 due to an unexpected on an Army ammunition contract that goes for 10 years.

Sales increased 3 percent from 2016 but with rounding were still around $1.1 billion for both periods.

All three of the company’s operating segments reported higher top lines, up 5 percent across the board, and lower bottom lines than in 2016. Higher corporate eliminations than in 2016 lowered the overall topline growth to 3 percent.

The higher sales were driven by activity in the Aerospace Structures, Armament Systems, Satellite Systems, and Advanced Programs divisions. The lower earnings were driven by a higher tax rate and difficult comparisons versus in 2016 when the company benefited from favorable profit adjustments on certain contracts.

Record bookings in the Defense Systems segment drove backlog to a record $9.8 billion, up 12 percent from 2016. International orders accounted for about 50 percent of defense bookings and nearly 40 percent of total company orders, David Thompson, Orbital ATK’s president and CEO, said on the company’s earnings call.

Orders in 2017 will be less than the $6.6 billion reported in 2016, Thompson said. International business is expected to account for 25 to 30 percent of bookings in 2017, up from 15 percent in 2016, he said.

Thompson said Orbital ATK is on all three teams competing for the Air Force’s new intercontinental ballistic missile (ICBM) program, the Ground Based Strategic Deterrent (GBSD), with most of the company’s expected work in the area of its solid rocket motors as the primary propulsion system for the replacement to the existing Minuteman III ICBMs. The sales contribution from GBSD in the “next couple of years” will be “very modest” but in the long-term it will be a “franchise program for decades.”

Free cash was an $83 million outflow but like earnings and sales guidance for 2017, the cash outlook remains unchanged.

Sales in 2017 are pegged to be around $4.6 billion, earnings between $5.80 and $6.20 EPS, and free cash flow in the range of $250 million to $300 million.