Elbit quiet on impact of war effort on operations

August 9, 2006 08:02

The company said, however, it expects to continue its growth through 2007 after ending the second quarter with a record order backlog.

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elbit logo 88. (photo credit: Courtesy)

Defense company Elbit Systems remained quiet Tuesday on how strong an impact its supply of product to the Israel Defense Force during its operations in Lebanon will have on its business. The company said, however, it expects to continue its growth through 2007 after ending the second quarter with a record order backlog. "We support the IDF certainly on a daily basis as much as we can but we will talk about orders only when the war ends and our soldiers are back home," Joseph Ackerman, president and chief executive officer of Elbit Systems told The Jerusalem Post Tuesday. "Certainly our technology and systems are taking part in the battles in Lebanon and our equipment is relevant in these events." Ackerman added that operations at the company, which has its headquarters in Haifa, have been unaffected by the conflict which began about one month ago. Gilad Ben Avi, an analyst at Union Bank, said he doesn't believe the war will have a significant impact on Elbit's business due to the long-term nature of its projects with the IDF. "Remember that the IDF is a big customer but only contributes around 20% to 30% of the total revenues. Elbit's main customer is the US government and it's much more important what happens in the US than what happens here," Ben Avi said, adding that the demand of the IDF through the war is for more simple systems and not sophisticated projects like an upgrade to an F-16 or Apache or electro-optics systems. Even without a boost from higher IDF orders over the last month, Ackerman said the company expects to end 2006 with strong growth over last year, which he said will continue into next. "We look forward especially to the synergy of Elisra, Elbit and Tadiran and the nice backlog that we have and I foresee 2007 as being a very solid year for the company," Ackerman said. Elbit reported Tuesday its highest ever backlog of orders - $3.6 billion - at the end of June. Net income for the quarter was $15.1 million, compared to $10.9m. last year, while diluted earnings per share were 36 cents, up from 26 cents in 2005. Revenues grew 41.1% to $344.8m., from $243.8m. "The strong performance for the quarter was predictable as revenues were boosted by its merger with Tadiran and Elisra and engine growth," Union Bank's Ben Avi said. "The growth will continue and will not be influenced in either way by the war in Lebanon."

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