UPDATE 2-Lockheed Martin sales, profit miss Wall St estimates

(Adds detail on results, forecast and share performance)

Oct 24 (Reuters) - Lockheed Martin Corp's quarterly profit and sales missed Wall Street estimates on Tuesday, sending shares down more than 2 percent, but the Pentagon's No. 1 weapons supplier raised its full-year sales forecast and set a higher dividend.

Despite the first profit miss after five quarters in a row of beating estimates, Lockheed forecast sales would grow two percent next year as the company banks on increased defense spending under U.S. President Donald Trump.

Compared with the same quarter last year, Lockheed's net earnings from operations fell 13.8 percent to $939 million, or $3.24 per share, from $1.1 billion, or $3.61 cents per share. Increased sales of $12.2 billion from $11.6 billion a year ago, were below Wall Street's expectations.

Analysts had expected $3.26 per share on revenue of $12.81 billion, according to Thomson Reuters I/B/E/S.

Lockheed's aeronautics division, which makes the F-35 fighter jet, was the only Lockheed business unit to increase profitability from the comparable quarter last year.

Operating profit from Lockheed's Space Systems business unit halved to $218 million, partly due to a non-recurring pre-tax gain in the third quarter of 2016, and slightly lower sales volume in two government satellite programs.

Still, the Bethesda, Maryland-based company increased its full-year 2017 sales forecast to $51.2 billion, from $50 billion, citing its continued focus on operational performance and $200 million worth of property sales.

But even the raised outlook for 2018 came with caveats as it included a drop in projected cash flow compared with 2017.

The company sees 2017 ending with diluted higher earnings per share between $12.85 and $13.15, up from its previous estimate of $12.30 to $12.60 per share. In addition, Lockheed said it would raise its quarterly dividend rate by 10 percent to $2.00 per share.

Lockheed shares were down 2.2 percent at $313.75 in midday trading. Despite Tuesday's drop, Lockheed shares trade near record highs and have more than tripled in the last five years.

(Reporting by Mike Stone in Washington, DC; Editing by Nick Zieminski and Chris Sanders)