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Friday, March 16, 2007 5:32:38 AM
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
Recent ESLT News
- Elbit Systems Announces a Postponement of its Extraordinary General Meeting of Shareholders • PR Newswire (US) • 04/17/2024 05:55:00 PM
- Elbit Systems Announces Amendment to the Company's Proxy Statement • PR Newswire (US) • 04/01/2024 08:38:00 AM
- Elbit Systems Announces the Filing of its Annual Report on Form 20-F for Fiscal Year 2023 • PR Newswire (US) • 03/28/2024 12:34:00 PM
- U.S. Index Futures on the Rise, Oil Prices Show Stability • IH Market News • 03/26/2024 11:21:42 AM
- ELBIT SYSTEMS REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS • PR Newswire (US) • 03/26/2024 08:39:00 AM
- Elbit Systems Awarded Approximately $300 Million Contract to Supply Defense Solutions for an International Customer • PR Newswire (US) • 03/25/2024 09:24:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 03/05/2024 11:00:51 AM
- Elbit Systems Reports Impact on its Fourth Quarter 2023 Financial Results Due to Non-Cash Expenses • PR Newswire (US) • 03/05/2024 08:43:00 AM
- Collins Elbit Vision Systems delivers 3,000th F-35 Gen III Helmet Mounted Display System to the Joint Strike Fighter • PR Newswire (US) • 02/26/2024 02:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/26/2024 11:01:02 AM
- Elbit Systems Awarded an Approximately $600 Million Contract to Supply Systems for the Redback IFV Under the Australian Land 400 Phase 3 Project • PR Newswire (US) • 02/26/2024 08:23:00 AM
- Elbit Systems Schedules Fourth Quarter & Full Year 2023 Results Release for March 26, 2024 • PR Newswire (US) • 02/26/2024 08:06:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/21/2024 11:09:37 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/20/2024 11:02:50 AM
- Elbit Systems Awarded a $300 Million Contract to Supply Armored Vehicle Systems to a European Customer • PR Newswire (US) • 02/20/2024 07:33:00 AM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/14/2024 08:09:01 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 12/18/2023 11:03:51 AM
- Elbit Systems Awarded Contracts from the Israel Ministry Of Defense in an Aggregate Material Amount • PR Newswire (US) • 12/18/2023 09:06:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 11/29/2023 11:00:41 AM
- Elbit Systems of America Awarded an ID/IQ Contract With a Ceiling of $500 Million for the Supply of Squad Binocular Night Vision Goggles to the U.S. Marine Corps • PR Newswire (US) • 11/29/2023 07:05:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 11/28/2023 11:03:51 AM
- ELBIT SYSTEMS REPORTS THIRD QUARTER 2023 RESULTS • PR Newswire (US) • 11/28/2023 10:15:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 11/06/2023 11:00:51 AM
- Elbit Systems Schedules Third Quarter 2023 Results Release For November 28, 2023 • PR Newswire (US) • 11/06/2023 07:29:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 10/30/2023 10:01:07 AM
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