CORRECTED-UPDATE 1-Lockheed Martin profit rises on lower pension liability
(Corrects headline and paragraph 1 to say profit rose due to lower pension liability, not because of a change in pension plans)
* Raises 2014 profit forecast to $10.85-$11.15/share
* Q2 earnings $2.76/share vs $2.64 a year earlier
* Records pension income of $85 mln
July 22 (Reuters) - Lockheed Martin Corp, the Pentagon's largest defense supplier, reported a 3.5 percent rise in quarterly profit as higher interest rates lowered its pension liability.
The maker of the F-35 fighter jet, satellites and coastal warships also raised its 2014 earnings forecast to $10.85-$11.15 per share from $10.50-$10.80.
Lockheed's shares were up 2.4 percent before the bell.
Lockheed has amended some of its pension plans for non-union employees to freeze future retirement benefits and will instead transition them to a contribution retirement savings plan.
The company said it recorded pension income of $85 million for the second quarter ended June 29, compared with an expense of $120 million a year earlier.
Lockheed also said it expects to resume share repurchases in the current quarter. The company had ceased buybacks while it was considering amendments to its benefit pension plans.
The company's net income rose to $889 million, or $2.76 per share, from $859 million, or $2.64 per share, a year earlier.
Lockheed reported a 13 percent rise in revenue at its aeronautics business - its largest unit - due to a larger number of production contracts for the F-35 fighter jet.
With an estimated cost of $400 billion, the radar-evading jet is the world's most expensive weapons project.
Total revenue fell about 1 percent to $11.31 billion, hurt by a decline in U.S. government spending.
Lockheed's shares have gained about 41 percent in the past year, compared with a 16 percent rise in the S&P 500 index . They were up at $167 in premarket trading after closing at $162.98 on the New York Stock Exchange on Monday. (Reporting by Sagarika Jaisinghani in Bangalore; Editing by Maju Samuel and Saumyadeb Chakrabarty)