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UPDATE 1-Raytheon's third-quarter profit climbs 5 percent, boosts forecasts

(Adds CFO comment, updates shares)

Oct 26 (Reuters) - Tomahawk missile maker Raytheon Co reported a 5 percent rise in quarterly profit on Thursday, selling more laser-guided bombs and GPS-guided artillery rounds, and bumped up its annual sales and profit forecasts for the third time this year.

Shares were up as much as one percent in premarket trading.

The maker of the Patriot missile system is benefiting as U.S. and allied military operations demand more weapons to take on heightened global conflicts and possible threats.

The Waltham, Massachusetts-based weapons maker raised the lower end of its 2017 sales forecast by about $200 million to $25.3 billion, and kept the top end unchanged at $25.6 billion.

"This is now 5 to 6 percent sales growth over 2016, and our prior range was 4 to 6 percent," Raytheon's Chief Financial Officer Toby O'Brien told Reuters in an interview.

Raytheon increased its expectation for full-year earnings from continuing operations to $7.45-$7.55 per share, from $7.35 to $7.50 per share, partly due to lower interest expense and a lower tax rate.

The company expects 2017 operating cash flow from continuing operations of $2.8 billion-$3.1 billion.

Raytheon and other U.S. weapons makers are expected to benefit in the coming year from an increase in overall defense spending under President Donald Trump's administration.

Sales at Raytheon's missile systems unit, its biggest by revenue, surged 9.9 percent to $1.95 billion in the third quarter ended Oct. 1, helped by higher sales of the Paveway family of laser-guided bombs and the Excalibur GPS-guided precision projectiles, the company said.

Operating margin in the unit rose 1.1 points to 14.4 percent.

Sales at its integrated defense systems business, which makes the Patriot missile system and surveillance and search radars, rose 4.3 percent to $1.39 billion, on higher sales from an international early warning radar program, the company said.

Operating margin rose 0.8 points to 16.6 percent.

Raytheon's overall income from continuing operations rose to $568 million, or $1.97 per share in the third quarter, from $541 million, or $1.84 per share, a year earlier.

Total sales increased 4.5 percent to $6.28 billion.

Raytheon's shares have surged 33.2 percent this year, outperforming a 14.2 percent increase in the benchmark S&P 500 index. (Reporting by Mike Stone in Washington and Ankit Ajmera in Bengaluru; Editing by Bernard Orr and Bernadette Baum)