UPDATE 3-Lockheed Martin revenue beats, outlook strong for 2018

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Jan 29 (Reuters) - Lockheed Martin Corp reported quarterly revenue on Monday that beat Wall Street estimates, helped by higher F-35 fighter jet sales, and forecast better-than-expected 2018 profit.

Shares of the U.S. defense contractor rose 2.2 percent to $352.42 in morning trading.

Lockheed took a $1.9 billion charge in the fourth quarter ended Dec. 31, mainly due to bringing back overseas profits and writing down the value of future tax benefits after the new U.S. tax code was signed into law in December.

Excluding a deferred non-cash gain of $122 million, or 43 cents per share, and the tax charges, Thomson Reuters I/B/E/S calculations showed Lockheed earned $3.87 per share versus analysts estimate of $4.07 per share.

Lockheed gave an adjusted figure for earnings from continuing operations of $4.30 per share.

Strength in the aeronautics business helped boost overall net sales to $15.14 billion from $13.75 billion a year earlier, beating Wall Street estimates of $14.72 billion.

Adjusted for new accounting standards from Jan. 1, Lockheed said it expects 2018 net sales in the range of $50 billion to$51.5 billion and earnings per share of $15.20 to $15.50.

Analysts on average had expected full-year earnings per share of $14 and revenue of $51.2 billion.

Lockheed, like its peers in the United States, is expected to gain from an increase in defense spending under U.S. President Donald Trump's administration.

Trump is expected to ask for $716 billion in defense spending in the 2019 budget he is set to unveil next month, a 7 percent increase over the 2018 budget. The 2018 $700 billion budget still has not passed through Congress.

But analysts have panned the news of Trump's 2019 increase as small once adjusted for inflation.

Lockheed said quarterly sales in its aeronautics business, its biggest, grew 11.8 percent to $6.05 billion. The profit margin for division grew by 20 percent in the quarter as the F-35 program continued to mature.

The U.S. Defense Department expects to spend some $391 billion over 15 years to develop and buy 2,456 of the supersonic F-35 warplanes.

For the year, sales in Lockheed's aeronautics division rose to $20.1 billion from $17.7 billion while profit margins increased slightly to 10.7 percent.

Rotary and Mission Systems, which makes Sikorsky helicopters and ships, ended the year strong with quarterly net sales up 14 percent to $4.35 billion from $3.81 billion.

Lockheed said accounting issues it had identified at Sikorsky had been rectified while reporting no significant problems. Lockheed purchased Sikorsky Aircraft from United Technologies Corp in November 2016. (Reporting by Mike Stone in Washington and Ankit Ajmera in Bengaluru; Editing by Meredith Mazzilli)