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Elbit Systems - Sophisticated defense technologies for the next decade
I was pleased to finally see the right description given to the business of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), one of my top picks for the next decade. The right description is International Defense Electronics Company. I would add the word sophisticated after International, but even without it, the description is appropriate. It should be understood that defense electronics will be the big story of the next decade or until they beat terrorism - whichever comes first.
It looks clear to me that as Israel will be staying in the US camp (the other side simply doesn't want us, even though it would be happy to use the products of the Haifa company), Elbit Systems will grow at the expense of the current government-controlled defense industries. It will take time and a lot of convincing and battles with workers' committees and interested parties but eventually Elbit Systems will gobble up fast-growing government companies. So between the ongoing privatization and the company's own organic growth, I feel safe for the next 20 years.
20 years, however, is a long time, so let's take another look at how things are at present. I'll start with the company's orders backlog (which, I was told, is real and is anchored by contracts), which stood at $3.79 billion at the end of 2006, compared with $3.35 billion at the end of 2005. 70% of the orders backlog is scheduled for delivery through 2007-2008, and 68% of it is to customers outside Israel. Elbit Systems' revenue rose by more than 42% to $1.523 billion in 2006, from $1.07 billion in 2005. Net profit soared 122% to $72 million, while diluted earnings per share climbed 120.5% to $1.72 from $0.78. The company accomplished all this despite the burden on its financial statements caused by the acquisition of Elisra Group.
Although I'm very keen about Elbit Systems, especially with regard to its long-term prospects, it nevertheless does have a few weak points. Firstly, the balance sheet is weak in terms of its assets versus its liabilities. A company like Elbit Systems, which could find itself bidding for mega deals, ought to have a stronger balance sheet. There has, however, been a great improvement, compared with the days when I first started following the company many years ago, but I'll be quite happy if this continues to be the only blip on the horizon. Then there is also the company's profit margins which I feel are a tad low. The net profit on sales is too low (certainly when compared with that of the company's US rivals). Having noted all this, I have no doubt that company CEO and president Joseph Ackerman has a good grasp of the issues involved here and that the company will continue its streamlining, strengthening its financial base even further.
Published by Globes [online], Israel business news - www.globes.co.il - on March 15, 2007
http://www.globes.co.il/serveen/globes/docview.asp?did=1000193395&fid=1052
Elbit Systems' looking for new acquisition in Israel and abroad
14.3.07 | 15:29 By Nathan Sheva
Speaking at the Elbit Systems press conference today, company chief executive and president Joseph Ackerman admitted that Elisra Electronic Industries had been in worse shape than they'd realized when Elbit Systems bought the company. "But I do not regret the acquisition or the company's value in it," Ackerman stated. "It's a good company."
If Elbit Systems thought the synergy between the two companies would start yielding fruit in two or three years, well - it was wrong, he confessed. "It may take longer. But it will happen."
Elbit Systems bought 70% of Elisra at a company valuation of $100 million from Koor Industries (NYSE: KOR). In a parallel set of moves it acquired the controlling interest in Tadiran Communications (TASE: TDCM) at the end of 2005.
Elisra lost $26 million on revenues of $219 million in 2006, and remains a millstone around Elbit Systems' neck. Despite that weight, Elbit Systems today reported record results for last year.
"There is no reason why Elisra shouldn't be a profitable company. Elisra has the best electronic warfare technologies in the world," Ackerman says.
What it needs is to become more efficient, he explains. "First of all, the company operates on to sites. It should be consolidated on one. Also, the consent of the workers has to be obtained for efficiency steps planned for the company," he describes. More layoffs are in the offing, though not many.
But more orders poured in than ever before last year, Ackerman says, and also, Elbit Systems has already consolidated the three companies of which Elisra consisted into one.
Unlike most Wall Street-listed companies, Elbit Systems doesn't provide guidance for investors. But Ackerman promises that the year 2007 will be better by all parameters. Also, the trend of merger and acquisition will continue, he said: Elbit Systems means to look for a suitable target in Israel, the U.S. or Europe.
At present 40% of Elbit Systems' sales are to the United States, about $600 million a year. The American defense budget is $600 billion a year, which means there's a lot of potential room for Elbit Systems to grow. Sales to Europe, to which the company hardly sold in the past, comprised 15% of sales last year, Ackerman said. Israel is responsible for 27% of its turnover.
Asked whether Elbit Systems might bid if Israel Military Industries is privatized, he commented that the longer the government remains its owner, the more it deteriorates.
http://www.haaretz.com/hasen/spages/837792.html
Agree, the backlog and revenues show strength. There is a plan (that will cost $16M) regarding Elisira but I don't know how long will it take before it will become profitable.
>The only problem is Elbit's gross margin which was quite low- 21.4%. It is 25.5% excluding Elisra.<
The gross margin will get back to its old level as Elisira becomes fully integrated.
I’m more interested in the top line and the backlog, which are doing great. The bottom line will take care of itself, IMHO.
The only problem is Elbit's gross margin which was quite low- 21.4%. It is 25.5% excluding Elisra.
Ho-hum… another great quarter (eom)
Elbit Systems 2006 revenue up 42% to record $1.5b
Net profit rose 122% to $72.2 million.
Globes’ correspondent 14 Mar 07 10:55
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) today published its consolidated financial reports for the fourth quarter of 2006 and the year as a whole. 2006 revenue rose 42% over 2005 to $1.52 billion, and its net profit rose 122% to $72.2 million ($1.72 per share).
The company’s orders backlog at the end of 2006 was $3.79 billion, up 13.1% from the end of 2005. 68% of the orders are for international customers, and 70% are slated for delivery in 2007-08.
Elbit Systems posted $467.4 million revenue for the fourth quarter, up 45.3% on the corresponding quarter of 2005. The company posted a net profit of $24 million ($0.57 per share), compared with a net loss of $5.7 million ($0.14 per share) for the corresponding quarter.
The company beat the analysts’ consensus of earnings per share of $0.50 on $388.1 million revenue for the fourth quarter
The company will distribute a dividend of $0.16 per share on its fourth quarter profit.
Elbit Systems president and CEO Joseph Ackerman said, “We have also begun to see the results of our long-term development strategy that enabled us to pass $1.5 billion in revenues for the first time and to deliver another year of record net profit and cash flow. Our results were achieved despite the negative impact from Elisra's financial performance, and we intend to continue the Elisra turn-around in 2007.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 14, 2007
Israel unveils the Viper - a robot for urban warfare and counterrorism
Mar. 08 - An Israeli robot for urban warfare and counterterrorism, the first of its kind in the world, is being unveiled at a military exhibit in the United States, the Israeli paper Yediot Aharonot reported. The Viper, which was developed by Elbit Systems, is capable of shooting bursts of automatic fire and throwing fragmentation, smoke and stun grenades. "What was science fiction until not so long ago is now becoming operational tools that will create a revolution in counterterrorism," an Israeli expert in counterterrorism systems said. The Viper, which is about a foot long and weigh approximately five pounds, is powered by a special electrical engine and operated by remote control or according to a program implanted in its 'brain' in advance. It is capable of climbing stairs, getting past obstacles and at the same time checks what is going on around it by means of a system of sensors. Equipped with a special nine-millimeter caliber Uzi machine gun, on which a laser pointer has been installed. The Viper is carried to the battlefield by a soldier on his back in a special carrier. When it is necessary to infiltrate a building safely where, for example, armed terrorists are hiding, the soldier lowers it to the ground, turns it on and from that moment controls it from a distance.
http://www.israel21c.org/bin/en.jsp?enDispWho=InThePress&enPage=BlankPage&enDisplay=view&...
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) will set up the “Zofit” simulator system in Israel, and it has also won a handsome contract with the US Marines. The first contract, under which Elbit will train Israeli and foreign pilots referred to it by the Ministry of Defense is worth $15 million, while the second, under which Elbit will provide laser-based target identification systems to the marines is worth $51 million.
These sums are small, relative to the volume of Elbit Systems’ revenue, but anyone who realizes where this can lead will not fail to be impressed. As I have said ever since the 9/11 terror attacks, Elbit Systems, thanks to its management and Israeli know-how in smart defense electronics, is an investment about which I cannot make any predictions as to how long its superior value will last.
Published by Globes [online], Israel business news - www.globes.co.il - on March 1, 2007
http://www.globes.co.il/serveen/globes/docview.asp?did=1000188470&fid=1052
Bulgaria is not exactly hostile to Israel, but of course
Russia's pressure is not something Bulgaria can afford to ignore.
Dubi
From your August 2006 post on the same subject (#msg-12651148):
“...after the contract was signed, Russia applied heavy pressure on Bulgaria to cancel it, and warned Bulgaria that Russia would not provide licenses for helicopters upgraded by Elbit Systems.”
I think it’s a credit to ESLT’s expertise that countries hostile to Israel consider buying from ESLT in the first place.
Elbit Systems and Bulgarian Ministry of Defense are in the Process of Cancellation of Helicopter Modernization Contract
Tuesday January 30, 10:52 am ET
HAIFA, Israel, January 30 /PRNewswire-FirstCall/ -- Elbit Systems Ltd. (the "Company") (NASDAQ:ESLT - News) announced that on January 29, 2007, the Company received notice from the Bulgarian Ministry of Defense for the termination of the contract to the amount of EUR57 million, for the modernization of Mi-24 and Mi-17 helicopters for the Bulgarian Air Force. The Company had previously announced the award of this contract on December 4, 2005. In the cancellation notice, the Bulgarian Ministry of Defense requested a return of a portion of the amounts paid to date to the Company under the contract.
Over the past several weeks, Elbit Systems has been in discussions with the Bulgarian Ministry of Defense regarding a mutually acceptable cancellation of the contract. Moreover, the contract cancellation discussions with the Bulgarian Ministry of Defense have been based on appropriate compensation to the Company, and Elbit Systems does not anticipate that this matter will have a material adverse effect on the Company's results of operations.
http://biz.yahoo.com/prnews/070130/uktu018.html?.v=61
Bulgaria cancels Elbit Systems contract
The company was due to upgrade 18 Bulgarian Air Force Mi-24 and Mi-17 helicopters for €57 million.
Golan Fridenfeld 30 Jan 07 18:50
The Bulgarian Ministry of Defense has cancelled a €57 million contract for Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) for the modernization of helicopters for the Bulgarian Air Force. The Bulgarian Ministry of Defense has requested a return of a portion of the amounts paid to date to the company under the contract.
Elbit Systems announced that it won the contract on December 4, 2005. Over the past several weeks, the company has been negotiating with the Bulgarians on a mutually acceptable cancellation of the contract. The cancellation will include appropriate compensation, and Elbit Systems does not anticipate that cancellation will have a material adverse effect on its results.
Elbit Systems was to upgrade 18 Russian made Mi-24 and Mi-17 over a period of three years. On February 21, the company signed a contract with TEREM aviation repair plant for the upgrade. Under the BGN 13 million contract, the repair work will be executed in TEREM's branches in Sofia and Plovdiv.
Published by Globes [online], Israel business news - www.globes.co.il - on January 30, 2007
Bulgaria cancels 57 million euro contract with Elbit Systems
30.1.07 | 23:09 By Omri Cohen
Elbit Systems (Nasdaq: ESLT) said Tuesday that Bulgarian defense officials have canceled a 57 million euro contract for work on Mi-24 and Mi-17 helicopters.
Elbit had received the contract in December 2005.
The company said it received some compensation from Bulgaria for the canceled contract and does not expect it to have a material impact on company earnings.
In recent weeks Elbit Systems had been negotiating with the Bulgarian defense authorities over the terms of canceling the contract. At the end of the third quarter, Elbit Systems' backlog of orders stood at $3.78 billion. The Bulgarian contract comprises just 2% of that backlog.
http://www.haaretz.com/hasen/spages/819626.html
AeroVironment Soars 41% on First Day
http://biz.yahoo.com/rb/070123/aerovironment_ipo.html?.v=1
>>
Tuesday January 23, 2:36 pm ET
NEW YORK (Reuters) - Shares of AeroVironment Inc. (NASDAQ: AVAV ) on Tuesday soared as much as 54 percent in their U.S. market debut, boosted by prospects for its small unmanned aircraft, despite competition with larger firms, analysts said.
Shares of the company opened 47 percent higher at $25 and rose to $26.22 before retreating to $23.90, up 40.6 percent, in afternoon trading on the Nasdaq.
The Monrovia, California-based company has developed a series of remotely operated aircraft which can be launched by a single person and provide video images for intelligence, surveillance and reconnaissance.
Customers include the U.S. Army, Marine Corps and Special Operations Command. As of October 28, 2006, AeroVironment had a funded backlog of $69.5 million and an estimated unfunded backlog of $491.5 million, according to documents filed with the U.S. Securities and Exchange Commission.
Alongside a call for more troops by President Bush, the company also benefited from a thin calendar of scheduled initial public offerings, said Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles.
"This was the first good deal coming out in a fairly good (broader) market," Morreale said.
Only three companies have priced IPOs this year, raising $395 million, during a traditionally slow period for new issuance.
COMPETITION FROM LARGER FIRMS
The $25 opening price valued AeroVironment at about $454 million. The company also trades at 27 times revenue annualized from the six-month period prior to October 28, 2006, said Scott Sweet, managing director for IPO research firm IPOboutique.com.
The multiple is expensive compared with larger defense contractors, such as Israel's Elbit Systems Ltd. (Tel Aviv: ESLT.TA; NASDAQ: ESLT ) and Lockheed Martin Corp. (NYSE: LMT ), which also develop unmanned aircraft. Elbit and Lockheed Martin trade at 20 times and 17 times 2006 revenue.
But AeroVironment's planes, which can be carried by a single soldier, are smaller and serve a specific military need. Continued use of the planes could also spur growth into international markets, Sweet said.
"Their engineering and battlefield success should open up a whole new avenue for sales through allied nations," Sweet said.
AeroVironment also sells a rapid recharge system for electric industrial vehicles, such as forklifts and airport ground support equipment. Customers for the PosiCharge products include Ford Motor Co. (NYSE: F), Sysco Corp. (NYSE: SYY ), Southwest Airlines Co. (NYSE: LUV) and IKEA, the world's largest furniture retailer.
On Monday, the 6.7 million-share initial public offering raised $113.9 million after pricing at $17 apiece, compared with a $14 to $16 forecast. AeroVironment offered about 4.5 million shares, while selling stockholders offered about 2.2 million shares, according to a filing with the U.S. Securities and Exchange Commission.
The company plans to use net proceeds from the offering, which represents a 37 percent stake in the company, for working capital and general corporate purposes, including research and development of new products, sales and marketing, acquisitions and other capital expenditures.
Led by Goldman Sachs & Co., underwriters have the option to purchase an additional 1 million shares to cover overallotments, according to the SEC filing.
<<
U.S. army raises ceiling on contract with Tadiran to $125 million
22.1.07 | 10:01 By Tal Levy
The U.S. army's communications and electronics corps has jacked up its IDIQ (indefinite delivery, indefinite quantity) order from the Israeli defense-systems company Tadiran Communications (TASE: TDCM) , which is a subsidiary of Elbit Systems (Nasdaq: ESLT) .
The army's contact is technically with Tallahassee Technologies, also known as Talla-Tech, which is a fully owned member of the Tadiran group.
The original contract, signed in 2004, was to upgrade and supply parts and maintenance services for advanced communications devices. It determined that Talla-Tech would supply up to $80 million worth of Sincgrass radio devices to the U.S. army over three years.
Now the ceiling has been raised to $125 million.
The principle of IDIQ contracts is that they enable the customer to order products and services from time to time, at short notice, up to the predetermined ceiling. So far the U.S. army has used up about $60 million of its IDIQ contract with Tadiran.
Amos Weizman, CEO-designate of Tadiran, commented that the company's activities in the U.S. via its subsidiaries have been increasing, and that increase in the IDIQ demonstrates the customer's satisfaction with the Tadiran group's products.
http://www.haaretz.com/hasen/spages/816376.html
Rising Pentagon Spending
Quells Talk of Profit Plateau
http://online.wsj.com/article/SB116900861317078646.html
>>
By JONATHAN KARP
January 17, 2007
Defense contractors have enjoyed surging profits in recent years as the government spent heavily to fight wars in Iraq and Afghanistan and combat terrorism in other parts of the world. Recently, some investors have worried that ballooning federal deficits could bring the flush times to an end.
But with the makers of warplanes, tanks and battlefield technology expected to report strong fourth-quarter results beginning next week, the latest Pentagon plans suggest that the long-expected spending plateau is still another year away.
The January financial-reporting season for defense companies traditionally is tricky: It comes just days before the Pentagon unveils its budget for the next fiscal year, a document that frames investor expectations.
Major defense companies are expected to meet or exceed their quarterly targets, given that federal funds spent to buy and develop weapons in the October-to-December quarter rose 19% from the year-earlier period. That surge was in part a result of spending approved for the Iraq war in the previous fiscal year, analysts said.
Record Iraq war funding is likely to boost previously issued conservative profit outlooks for 2007 as well. Despite opposition to the Bush administration's Iraq policy and saber rattling about closer budget scrutiny, Congress's new Democratic leadership doesn't pose an immediate risk for the industry, analysts agree. Democrats are expected to broadly support Pentagon spending, though legislators may make modest trims and modifications to specific weapons programs.
To be sure, even as overall Pentagon spending rises, some of the biggest weapons programs face budget pressure because of cost growth. Potential trims to Boeing Co.'s Future Combat Systems modernization program for the Army or Lockheed Martin Corp.'s Joint Strike Fighter jet are unlikely to have immediate material impact on profits but could influence investors' longer-term outlook.
Even before President Bush announced he is sending extra troops to Iraq, the Pentagon in recent weeks telegraphed an imminent tsunami of spending requests. The fiscal 2008 budget will be followed by two separate emergency war-fund requests, for the current and coming fiscal years. These latest so-called supplemental budgets have wide scope to include weapons development and procurement.
"The outlook for the defense industry in 2007, and probably 2008, is quite good," says Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, an independent think tank in Washington. Between the annual Pentagon budget and supplemental war requests, weapons purchases will be "about $135 billion in 2007, the highest level since the late '80s," he says, even when adjusted for inflation.
That leaves breathing room for an industry that approached 2007 cautiously. Lockheed, the biggest contractor by sales, had a stellar 2006, and raised its full-year revenue and profit outlook when it reported third-quarter earnings in October. Yet at the time, the Bethesda, Md., aerospace giant outlined modest performance expectations for this year: up to 7.7% sales growth; up to 8.8% in operating-profit growth and a per-share earnings range from flat to 6.4% growth.
That was before the supplemental budget, which includes funds for two of Lockheed's Joint Strike Fighter and for 17 C-130 cargo planes, part of an Air Force request that will extend the production line of the venerable propeller-driven transport. Analysts expect Lockheed to beat consensus estimates for the fourth quarter and, along with other defense companies, set more ambitious 2007 financial targets.
Counting weapons research and development, the Pentagon's total investment account is expected to rise 22% to $213 billion, compared with $175 billion in fiscal 2006, according to George Shapiro, a defense analyst at Citigroup Inc.'s Citigroup Global Markets Inc. He foresees a solid 8% boost in weapons spending in the fiscal 2008 annual Pentagon budget, compared with the current year, not including supplemental war funding.
Howard Rubel, a Jeffries & Co. analyst, estimates that average operating margins at the 20 aerospace and defense companies he covers rose to 9.5% in 2006, compared with 8.7% in 2005, and he believes there is room to grow. Per-share earnings grew 16% last year, he predicts, compared with estimates of about 12% for the full Standard & Poor's 500-stock index.
Etc.
<<
Tadiran gets $20.5m follow-on Defense Ministry order
The company will supply advanced tactical communications systems to the IDF through its Florida subsidiary, financed by US military aid.
Roee Bergman 16 Jan 07 13:26
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) subsidiary Tadiran Communications Ltd. (TASE: TDCM) has received a $20.5 million follow-on order from the Ministry of Defense for advanced tactical communications systems for the IDF. The original $19.6 million order was placed in December 2005.
The communications systems support simultaneous high-speed voice and data transmissions, use advanced communications protocols and software-controlled radio features. Deliveries will be made during 2010 by Tadiran Communications’ Florida subsidiary Tallahassee Communications Industries Inc. (Talla-Com), and financed with US military aid. The company said it expects more orders for these systems in the future.
Tadiran Communications saw its business shrink during the third quarter of 2006, although its orders backlog grew. Last August, Tadiran Communications CEO Hezi Hermoni announced that he would leave the company, and Alex Weizman is due to replace him.
Published by Globes [online], Israel business news - www.globes.co.il - on January 16, 2007
Lofty Heights Expected from AeroVironment IPO
[AeroVironment may be one of those corporate names that’s too clever for its own good.]
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070112:MTFH11478_2...
>>
Fri Jan 12, 2007 5:24 PM ET
By Yung Kim
NEW YORK, Jan 12 (Reuters) - AeroVironment Inc.'s initial public offering is set for a strong reception later this month thanks to its military contracts, but there are longer-term risks for the maker of small unmanned aircraft, analysts said.
The Monrovia, California-based company has developed a series of small, remotely operated aircraft that can be launched by a single person and provide video images for intelligence, surveillance and reconnaissance.
The company's products have been boosted by the Iraq war, while prospects should be strong in coming years, with the U.S. military's efforts to improve information gathering, said Philip Finnegan, director of corporate analysis for the Teal Group Corp., a defense and aerospace research firm based in Fairfax, Virginia.
"If you look at the small (unmanned aircraft) used by the military, AeroVironment has really established a dominant position," Finnegan said.
That may explain why the company's valuation is so high in this offering. At $15, the midpoint of the forecast price range, AeroVironment shares would trade at almost 27 times earnings for the 12 months ended Oct. 28, according to calculations from data in the company's IPO filing with the U.S. Securities and Exchange Commission.
That multiple is pricey compared with the shares of defense companies, including Israel's Elbit Systems Ltd. <ESLT> and Lockheed Martin Corp. <LMT>, which trade at about 19.5 times and 17 times 2006 earnings, according to Reuters Estimates.
There are real risks to the AeroVironment story, analysts said. International expansion will play an important role in the company's ability to sustain growth, Finnegan said, noting the company's sales surge started with a small base.
The company needs to develop new relationships with defense departments around the globe, something it has not yet done, Finnegan added.
And it is not clear how strong the IPO market will be this year, analysts said.
"The first few IPOs that get off the ground are going to be somewhat of a litmus test for the appetite of investors," said David Menlow, president of IPOfinancial.com. "The fact that the company is profitable is a positive, but does not put it in the runaway category."
BIG BACKLOG
But to some analysts, the high valuation is entirely justified. "Increased usage of the AeroVironment (products) will likely open up future revenue opportunities with allied nations," said Scott Sweet, managing director for IPO research firm IPOboutique.com.
As of Oct. 28, 2006, AeroVironment had a funded backlog of $69.5 million and estimated unfunded backlog of $491.5 million [a tiny fraction of ESLT’s backlog], with customers that include the U.S. Army, U.S. Marine Corps and the U.S. Special Operations Command, according to the SEC filing.
AeroVironment also sells a rapid recharge system for electric industrial vehicles, such as forklifts and airport ground support equipment. Customers for the PosiCharge products include Ford Motor Co. <F>, Sysco Corp. <SYY>, Southwest Airlines Co. <LUV> and IKEA, the world's largest furniture retailer.
The company, which intends to list on the Nasdaq under the symbol AVAV , is scheduled to price shares on Jan. 22 amid a slow start to the 2007 IPO, despite momentum generated by $20 billion worth of new issues that closed 2006.
The company plans to sell 4.5 million shares, while selling stockholders [i.e. insiders] will offer 2.2 million shares, according to the SEC filing. Underwriters, led by Goldman Sachs & Co., will have the option to purchase an additional 1 million shares to cover overallotments.
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Official: Israeli defense industry losing millions
Israel Antitrust Authority is blocking cooperation between Israel Aerospace Industries and Elbit Systems
Arieh Egozi Published: 12.27.06, 07:42
A senior defense official said Tuesday that the Israel Aerospace Industries Ltd (IAI) and Elbit systems are losing millions of dollars every year over the Israel Antitrust Authority to okay a joint project for the development of sophisticated unmanned vehicles.
"This is causing direct losses in the millions of dollars, a waste of resources, and the loss of international markets," the official said, citing similar problems facing a project to develop new UAVs.
In May it was announced that Elbit, Israel's largest private defense company, and IAI had agreed to cooperate on a project to produce unmanned vehicles for intelligence gathering and patrol missions.
The two companies had planned to compete for a USD 1.9 billion tender by the South Korean government.
The Antitrust Authority said talks are ongoing with both companies to find a formula that will allow them to cooperate on the project.
http://www.ynetnews.com/articles/0,7340,L-3345011,00.html
Koor sells Elbit Systems stake for NIS 112.4m
The sale was transacted through an auction, which was won by investment bank UBS. (Corrected)
Adi Ben Israel 5 Dec 06 17:35
Koor Industries (NYSE: KOR; TASE: KOR) announced yesterday evening that it is selling its remaining 1.9% stake in Elbit Systems (Nasdaq: ESLT; TASE: ESLT) for NIS 112.4 million. The company expects to record a capital gain of NIS 23.8 million on the deal.
Koor sold its stake in Elbit Systems through an auction, which was won by investment bank UBS AG (NYSE; SWX: UBS). Sources inform ''Globes'' that the bank offered NIS 139 per share, 1.4% above yesterday’s closing price.
The sale by Koor of its outstanding stake in Elbit Systems had been widely expected by the market, with Elbit Systems falling 5% over the last five days in response. The closure of the deal is likely to “release” the pressure that the stock has been under during the past week.
Published by Globes [online], Israel business news - www.globes.co.il - on December 5, 2006
Elbit Systems' Subsidiary Elop to Provide Thermal Imaging Sensors for the Korean Tank K1A1
Wednesday November 29, 3:40 am ET
The Order is Valued at Approximately $19 Million
HAIFA, Israel, November 29 /PRNewswire-FirstCall/ -- Elbit Systems Ltd. (NASDAQ:ESLT - News) announced that its subsidiary Elbit Systems Electro-Optics Elop Ltd. ("Elop") will supply Thermal Imaging kits for the Gunner Periscope Sights of the Korean Tank K1A1. The contract is valued at approximately $19 million.
Selected as primary contractor of the project to upgrade Gunner Periscope Sights for the Korean tank K1A1, the Samsung-Thales Company will supply, install and test the systems. Sub contractor, Elop will provide the main components for the thermal sensors - the key element of the Gunner Periscope Sights that provide the night capability to the tank.
Elbit Systems Electro-Optics Elop General Manager, Haim Rousso said: "This latest order testifies to our leading role in the growing market of advanced electro-optical systems for defense and homeland security applications, as much as it reflects our vast experience in the development of advanced solutions for both the Israeli Defense Forces and other customers worldwide".
Elop provides turnkey and tailor-made integrated gunner and commander sight solutions for virtually every Main Battle Tanks (MBT) and Armored Fighting Vehicles (AFV) in service today. The Integrated Sights modular design combines direct view observation, TV channels, eyesafe laser rangefinders and a wide variety of night vision technologies with LOS stabilization and hunter-killer solutions.
http://biz.yahoo.com/prnews/061129/ukw003.html?.v=90
>>Michael Federmann’s Federmann Enterprises Ltd. has bought another 5.5% of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) from Koor Industries Ltd. (NYSE: KOR; TASE: KOR) in a very smart move, for two reasons. One is that Elbit Systems, in my opinion, is a Number One investment for the next decade, and I’ve said so more than once. The acquisition from Koor also severs Federmann from a partner whom I believe is only a hindrance.
In order to better understand why I’m so hot for Elbit Systems, I turn your attention to a report in Zacks on Tuesday about military electronics in the US. Zacks recommends L3 Communications Holdings Inc. (NYSE:LLL) as the best investment in the sector. I’ve told you before about this company, which is very similar to Elbit Systems. The acquisition should also make it easier for Federmann to sell part of his stake in the future is he wants, and I think he will, albeit not in the near term. >>
http://www.globes.co.il/serveen/globes/docview.asp?did=1000155804&fid=1052
Elbit Systems unveils unmanned patrol boat
The Silver Marlin is 10.6 m long, has a maximum speed of 81 kmh, and has a range of 500 km,
Amnon Barzilai 20 Nov 06 15:57
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) has revealed to “Globes” its “Silver Marlin”, an unmanned patrol boat with weapons stations and observation and communications systems, and capable of operating within a range of up to 500 kilometers. The company is negotiating with the Israel Navy to test and evaluate the boat’s performance for possible procurement.
Elbit Systems is the third Israeli company to develop an unmanned patrol boat, after Rafael Armament Development Authority Ltd. and Yavne-based Aeronautics Defense Systems Ltd. These unmanned patrol boats are designed for maritime anti-terrorism operations, operations in shallow water, search and rescue, and other missions.
Elbit Systems’ unmanned aerial and naval vehicles division developed the Silver Marlin. It is the company’s second-generation unmanned patrol boat. Unit head Col. (res.) Rami Ben-Ami said the Silver Marlin was different from unmanned patrol boats developed to date. Other unmanned patrol boats are remote controlled, whereas the Silver Marlin is autonomous. While first-generation unmanned patrol boats could operate from received commands, second-generation unmanned patrol boats can handle complete missions, including setting sail and returning to their home port using preset instruction, and maintaining an observation point.
Elbit Systems developed the Silver Marlin as part of the company’s strategic policy to emphasize unmanned platforms. The company is a leader in Israel and worldwide in UAV development, and has also developed the Avant-Guard automatic patrol vehicle.
Elbit Systems has not disclosed how much it spent on developing its unmanned patrol boats, but the figure is estimated at several million dollars. The Silver Marlin is 10.6 meters long, three times the length of first-generation unmanned patrol boats. It has a maximum speed of 81 kmh, weighs four tons, can carry a 2.5-ton payload, remain at sea for 24-36 hours, has an operational range of 500 km, and is equipped with two 315-horsepower diesel engines.
Published by Globes [online], Israel business news - www.globes.co.il - on November 20, 2006
It took 35 minutes on the CC for someone to ask about the U.S. “political situation.” LOL
.... and i have been kicking myself for having built
a position and getting out prematurely....
Regards,
Dubi
>orders backlog rose to $3.76 billion at the end of the third quarter…<
Impressive. When I started following the company, the backlog was only $2B.
Elbit Systems profit
grows 28.7%
The company’s orders backlog reached $3.76 billion at the end of the third quarter.
Roee Bergman 14 Nov 06 10:27
Elbit Systems (Nasdaq: ESLT; TASE: ESLT) has published its financial report for the third quarter of 2006. The company posted $376.7 million revenue, up 37.7% on $273.6 million in the corresponding quarter in 2005.
Elbit Systems’ orders backlog rose to $3.76 billion at the end of the third quarter, from $3.34 billion at the end of the 2005. 73% of orders are for customers outside Israel, of which 46% are due for delivery starting from the fourth quarter of 2006 through 2007.
Gross profit rose 30.5% to $96.1 million, 25.5% of turnover, from $73.7 million, 26.9% of turnover in the corresponding quarter last year. The fall in gross profit margin was caused primarily by lower gross profit for the company’s subsidiary, Elisra Group, which was integrated into Elbit during the course of December 2005.
Elbit Systems posted a net profit of $18.7 million (5% of revenue), up 28.7% on $14.6 million (5.3% of revenue) in the corresponding quarter. Third quarter earnings per share totaled $0.45, up from $0.35 in the corresponding quarter, and higher than the market estimate of $0.42. The figures for the third quarter of 2005 include a one-time expense of $1.2 million for R&D activity.
Following the publication of the third quarter report, the Elbit board approved a dividend of $0.15 per share.
Published by Globes [online], Israel business news - www.globes.co.il - on November 14, 2006
Elbit Systems beats Street Q3 forecast for sales, profit
14.11.06 | 11:59 By Nathan Sheva
Elbit Systems (Nasdaq: ESLT) today reported record results for the third quarter of 2006, noting improvement in all parameters.
The international defense systems maker said that by the quarter's end, its backlog of orders had soared to $3.8 billion, from $3.3 billion at the end of 2005. Almost three-quarters of the backlog is for orders outside Israel and almost half is for execution this year and next.
Consolidated revenues jumped by almost 38% to $376.7 million, from $273.6 million in the third quarter of 2005. Wall Street had expected a far lower $360 million in sales.
Elbit Systems grossed $96.1 million or 25.5% of revenues, a 30.5% jump against the parallel quarter.
Its margin in the third quarter of 2006 was affected mainly by the lower gross profit margin generated by Elisra, which has been consolidated in Elbit Systems' results from December 2005.
The company netted a consolidated $18.7 million or 5% of turnover, up from $14.6 million in the parallel quarter.
Diluted earnings per share for the third quarter of 2006 were $0.45, as compared with $0.35 for the third quarter of 2005. The Street had been looking at earnings per share of 42 cents per share.
http://www.haaretz.com/hasen/spages/787847.html