Second-quarter sales and profits at Lockheed Martin ( LMT) improved from the same period a year ago, and the Bethesda, Md., defense contractor increased its guidance for 2006. Lockheed reported quarterly earnings of $580 million, or $1.34 a share, up from $461 million and $1.02 a share a year ago. Sales rose 7% to $9.96 billion from about $9.3 billion in the previous year and topped expectations by around $200 million. The latest quarter had items that increased its earnings by $13 million, or 3 cents a share, the company said Tuesday. Even without the gain, Lockheed would have easily beaten the consensus Wall Street forecast of $1.16 a share. Last year, items added $27 million and 6 cents a share to earnings. The company also raised the low end of its sales forecast, predicting $38.5 billion to $39.5 billion on the top line this year. Lockheed's old guidance was for $38 billion to $39.5 billion. However, Lockheed significantly boosted its profit target, saying it should earn $5.10 to $5.30 a share, up from its earlier projection of $4.65 to $4.85. On average, analysts surveyed by Thomson Financial are calling for earnings of $4.93 a share and sales of $39.4 billion. Lockheed said the 45-cent increase is primarily attributable to an improved operational performance in all of its business segments, but it also factors in a reduction in the number of shares outstanding as a result of buybacks and a gain of 3 cents a share. Shares of Lockheed were trading up 90 cents, or 1.2%, to $77.68.