Northrop Grumman Corp. on Wednesday reported higher first quarter earnings, despite lower sales, as the defense contractor improved operating income.

The Los Angeles company reported net income of $530 million ($1.79 per share) compared with $469 million ($1.53) a year earlier. Revenue fell 3 percent to $6.73 billion. Operating income was up 19 percent to $811 million on lower corporate expenses and a small adjustment to its pension plan due to better investment returns.

Analysts surveyed by Thomson Reuters on average had expected per-share profit of $1.56 on revenue of $6.74 billion.

Northrop, which plans to relocate to the Washington D.C. area, said it now expects full-year per share profit to be between $6.50 and $6.70, up from a prior outlook of $6.40 to $6.60 a share from continuing operations. The company recently spun off its ship business into Huntington Ingalls Industries Inc. It plans use part of the $1.43 billion from the sale to expand its share repurchase program.

Northrop’s board authorized a buy-back program of up to $4 billion, which amounts to about one-fifth of outstanding shares. The board also increased the company’s quarterly dividend by 6 percent to 50 cents per share, payable on June 11.

“This was a very productive quarter,” said Chief Executive Wes Bush in a statement. “We completed the shipbuilding spin-off and our newly aligned portfolio generated solid financial results.”

Shares closed up 41 cents, or less than 1 percent, to $62.90 on the New York Stock Exchange.