BAE Systems, the FTSE 100 defence company, now expects free cash flow of around £3 billion this year, up from its previous forecast of more than £2 billion.
The upgrade includes some benefit from advance payments already received from customers, but excludes any large advances that may arrive before the year end.
Free cash flow was £2.2 billion last year.
The company kept the sales, profit and earnings guidance it raised at its half-year results in July.
It expects sales to grow 8% to 10% from £30.7 billion last year, with underlying earnings before interest and tax (EBIT) up 10% to 12% from £3.3 billion.
Underlying earnings per share are forecast to rise 11% to 13% from 75.2p.
Chief executive Charles Woodburn said the company's large order backlog gave it good visibility.
Orders flow in
BAE has won £33 billion of orders so far this year and expects further agreements before the end of December.
They include about £4.3 billion of further funding for the Dreadnought class submarines, which will carry the UK's nuclear deterrent.
The group also took about £1.6 billion of orders linked to the Global Combat Air Programme, the next-generation fighter jet project with Italy and Japan.
US awards included about $1 billion for munitions programmes and $0.8 billion for armoured vehicles for the US Army.
Frigate drag
Strong trading in electronic systems, air, and platforms and services more than offset slower growth and weaker margins in the maritime division.
The maritime division is still in the costly early stage of building the first Type 26 frigate.
BAE said governments across its markets remain committed to raising defence spending.
It expects to return about £1.6 billion to shareholders this year, including about £500 million of share buybacks.
