July 25 (Reuters) - U.S. defense company Northrop

Grumman ( NOC ) raised its forecast for full-year revenue and

profit on Thursday, amid increased global defense spending and a

strong backlog.

The ongoing war in Ukraine has fueled a strong demand for

U.S. weaponry in Europe, with nations actively engaged in

negotiations and striking deals to acquire arms and looking to

speed up ongoing contracts.

Northrop now expects annual sales of to reach up to $41.4

billion, up from its previous forecast of $40.8 billion to $41.2

billion. It sees adjusted profit per share between $24.90 and

$25.30, up from an earlier $24.45 to $24.85 per share.

The U.S. Congress' recent approval for $95 billion

additional funding, which includes aid for replenishing U.S.

stockpiles in Ukraine and Israel has benefited Northrop.

Other major defense contractors, such as Lockheed Martin ( LMT )

, RTX, and General Dynamics ( GD ) are also

benefiting from the new funds.

Northrop is facing cost challenges on some of its

fixed-price contracts due to inflation, strained supply chains,

and labor shortages.

The B-21 Raider program is expected to incur losses on

initial production contracts through 2030.

Additionally, the Northrop-managed Sentinel program, aimed

at replacing the aging intercontinental ballistic missile

system, has significantly exceeded its initial budget.

The company posted earnings per share of $6.36 for the

second quarter ended June 30, up from $5.34 per share a year

earlier. Sales rose 7% to $10.22 billion.

Profits in Northrop's Defense Systems segment jumped by 23%,

on high demand for ammunition and rocket motors used in guided

multiple-launch rocket systems, which are critical in the

Ukraine conflict.

Northrop and L3Harris ( LHX ) are the only companies that supply

these sought-after rocket motors.