WALTHAM, Mass. (AP) – Defense contractor Raytheon Co. said Thursday third-quarter earnings rose 42 percent, driven by sales gains across its divisions and lower pension expenses. The company also raised its outlook for the year.

Raytheon, which makes missiles and other defense electronics, said it earned $427 million or $1.01 per share, compared with $299 million, or 68 cents per share, a year earlier. The 2007 results were pushed down 18 cents per share by a loss related to the sale of a business unit.

On a continuing operations basis, 2008 third quarter results were up 12 percent.

Revenue rose 12 percent to $5.8 billion.

Analysts surveyed by Thomson Reuters were expecting 96 cents per share on $5.6 billion in revenue.

Raytheon expects to earn $3.95 to $4.00 per share in 2008, compared with $3.80 to $3.95 per share that the company forecast in July. Analysts are expecting $3.99 per share.

For 2009, the company expects earnings of $4.45 to $4.60 per share while analysts, on average, are predicting $4.46 in earnings.

“We are very comfortable with setting those expectations,” David Wajsgras, Raytheon’s chief financial officer, said of the company’s outlook.

Wajsgras said in an interview said that Raytheon is positioned to weather the current fiscal crisis, with $2.8 billion in cash on hand, a $2.2 billion line of bank credit and no plans to tap the seized up credit markets.

Standard & Poor’s and Fitch credit rating agencies upgraded the company’s credit during the quarter and the company authorized the repurchased of $2 billion worth in stock on Wednesday. Year-to-date, the company has bought back 16.7 million shares of stock for $1 billion.

Company shares were up 7 cents to $44.22 in electronic pre-market trading.

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