Leidos (NYSE: LDOS) stock is posting big gains Tuesday following the publication of the company’s third-quarter results. The company’s share price was up 9.6% as of noon ET.

Leidos published its third-quarter results before the market opened today, and results in the period received a bullish response from investors. In addition to strong Q3 numbers, the company also raised its full-year sales and earnings targets.

Leidos crushed earnings and landed big defense contracts in Q3

Leidos’s revenue increased 7% year over year in the third quarter to reach $4.2 billion. Meanwhile, non-GAAP (adjusted) earnings per share rose 44% year over year to hit $2.93. For comparison, the average analyst estimate had called for sales of roughly $4.07 billion and adjusted earnings of $2.02 per share in the period.

The company also said that it had recorded roughly $8.1 billion in bookings in the quarter, representing a bookings-to-billing ratio of 1.9. In other words, the company landed contracts worth nearly twice as much as total sales posted in Q3 — and these other deals will eventually be recorded as revenue. Leidos landed major new U.S. defense contracts in the quarter, and these wins powered positive updates to full-year sales and earnings guidance.

Leidos delivered a welcome earnings guidance overhaul

On the heels of its strong third-quarter sales and bookings, Leidos raised its full-year sales target to between $16.35 billion and $16.45 billion. Previously, management had guided for sales to come in between $16.1 billion and $16.4 billion. The previous average target from Wall Street analysts had called for sales of roughly $16.3 billion.

Leidos’s earnings target saw an even more eye-catching upward revision. The company now anticipates that adjusted earnings per share for the year will come in between $9.80 per share and $10 per share — far above its previous guidance for adjusted per-share earnings to be between $8.60 and $9. While the average analyst estimate’s call for adjusted earnings of $9.08 per share suggested that Wall Street had already anticipated an earnings beat, management’s new guidance blew that target out of the water. Forecasting additional defense contracts is difficult and involves speculation, but Leidos’s recent wins look very encouraging.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.