Raytheon Co. (RTN - Get Report)  fell on Thursday, Oct. 25, amid a broader defense selloff, even though it beat third-quarter earnings and revenue estimates and, as a result, raised full-year guidance.

The Waltham, Mass.-based aerospace and defense company reported earnings of $2.25 a share, which handily beat estimates of $1.97. Revenue of $6.81 billion also topped forecasts of $6.69 billion.

"Strong domestic and international bookings throughout the year drove record backlog and positions us well for continued growth in 2019," Raytheon Chairman and CEO Thomas Kennedy said in a statement.

Raytheon said backlog at the end of the third quarter was a record $41.6 billion, an increase of 13.4% year over year. 

The Tomahawk missile maker raised its full-year sales outlook to a range of $27 billion to $27.3 billion, up from its prior forecast of $26.7 billion and $27.2 billion. The revised sales guidance is above Wall Street's estimate of $26.9 billion.

Raytheon, which is a holding in Jim Cramer's Action Alerts PLUS portfolio, also increased its full-year earnings per share guidance to a range of $10.01 to $10.11 a share, compared to its previous outlook of $9.77 to $9.97 a share. The updated earnings outlook also surpassed the consensus estimate of $9.95 a share.

But uncertainties about the midterm election may be pressuring defense stocks as Democrats could take control of the House and they may push back against future defense budgets, which have increased under the Trump administration. 

Shares of Raytheon fell 3.1% to $176.56. Fellow defense companies were also down, including Northrop Grumman Corp. (NOC which fell 5.6%. Lockheed Martin Corp. (LMT - Get Report) tumbled 1.5% and General Dynamics Corp. (GD - Get Report) slipped 1.6%. 

"While we do expect sustained pressure and volatility as we approach the midterms, we are long-term investors and reiterate that at current levels, shares are simply too cheap given the increased defense spending domestically and from NATO allies, and heightened threat environment globally and have, in our view, priced in any midterm or Saudi Arabia related concerns," Cramer and the AAP team wrote in a note to subscribers.

-- This story has been updated to include comments from Jim Cramer and the AAP team.