BAE Systems (BAESY) stock rose sharply in London on Thursday after the weapons manufacturer, and one of Lockheed's (LMT - Get Report) F35 partners, beat expectations for full-year sales and earnings.

It reported sales of £19.02 billion ($23.7 billion) for the year, which was ahead of the consensus estimate for £18.85 billion, and delivered some positive numbers on the bottom line.

Underlying Ebit came in at £1.90 billion against expectations for a smaller print of £1.81 billion while underlying earnings per share were 40.3 pence, marginally ahead of the consensus for 40.2 pence.

The shares rose by as much as 2.4% after the opening bell before paring gains to change hands at 615.25 pence, up 1.7% on the day, extending a 3.15% gain over the past three months. 

"2016 was a good year for BAE Systems. Our strategy is well defined; we have a large order backlog, long-term program positions, strong program execution and a well-balanced portfolio," said outgoing CEO Ian King.

The company announced Wednesday that Chief Operating Officer Charles Woodburn would take the reins on July 1. 

Despite the strong headline numbers the results left some analysts unexcited given that much of the top line improvement was the result of foreign exchange movements, with organic growth remaining lackluster.

Jefferies analysts reiterated their hold rating and price target of 600 pence in response to the announcement.

"BAE's FY17 revenue guidance - using the mid-points by division - appears to point to very modest organic revenue growth," said Sandy Morris.

As a partner on the F35 program BAE Systems is also at risk from attempts by the U.S. government to reduce the cost of the of the project.

However, on a brighter note, the year ahead will see the first U.S. defense budget under President Donald Trump, which could yield a material increase in total defense expenditure.

This would be positive for the BAE order book given that the U.S. government is its largest customer by order value and maintains a full service product suite covering naval, land and air based defense systems.