Elbit Systems Reports Record Growth and Expands Production Capacity Amid Rising Demand
November 20, 2024
3:14 PM
Reading time: 3 minutes
Elbit Systems (TASE: ESLT; Nasdaq: ESLT), a leading Israeli defense company with subsidiaries in several other countries including the USA, has announced impressive financial results for the third quarter of 2024, marked by a record backlog of orders and significant revenue growth. The company reported a total backlog of $22.1 billion, reflecting a $1 billion increase during the quarter. Elbit's quarterly revenue rose by 14.3%, reaching $1.7 billion compared to the same period last year. In the first nine months of 2024, revenue increased by 12.6%, amounting to $4.9 billion.
On a non-GAAP basis, Elbit posted a net profit of $98.8 million for Q3, or 5.8% of its revenue, an increase from $76.5 million (5.1% of revenue) in Q3 2023. On a GAAP basis, the company achieved a net profit of $79.1 million (4.6% of revenue) for the quarter, compared to $60.7 million (4.0% of revenue) in the previous year. The company's earnings per share also showed solid growth, with non-GAAP diluted net earnings per share rising to $2.21 from $1.71 in Q3 2023, and GAAP earnings per share climbing to $1.77 from $1.36.
Expanding Production to Meet Demand
Elbit Systems' CEO, Bezhalel Machlis, highlighted the company's efforts to increase production capacity in response to growing demand. “We have invested heavily in capital equipment and stocks to scale up our production,” Machlis explained. The company is set to inaugurate a new UAV factory and has integrated automation and robotics into its production lines, which have boosted output by up to tenfold in some areas. Elbit is also expanding its workforce and increasing the number of suppliers to meet large orders, with production facilities in Ramat Hasharon and a new plant in Ramat Beka.
Navigating Supply Chain Challenges
Despite facing supply chain difficulties, particularly with certain suppliers no longer providing goods to Israel, Elbit Systems continues to navigate these challenges with alternatives and strategic stockpiling. Machlis addressed concerns regarding the Israeli Ministry of Defense’s procurement strategy, emphasizing that the Israeli government prioritizes purchasing domestically. "While there are some suppliers who no longer provide goods to Israel, we are managing to overcome these challenges," he stated.
A Strong Market Outlook Amid Global Uncertainty
Elbit Systems' market performance has been strong, with a 30% increase in stock price over the past three months. According to Machlis, this growth is a result of Elbit's strategic decisions, which include expanding into new fields and maintaining steady growth across various sectors. One key area of development is Elbit’s work on an airborne laser, which is expected to enhance its capabilities.
"Despite the challenges, Elbit has managed to grow in all fields and geographies, with stable forecasts and continuous profit improvement," Machlis said.
With a market cap of $10.6 billion, Elbit Systems continues to strengthen its position in the defense sector, poised to capitalize on emerging technologies and increasing global defense demand.