Israeli defense electronics firm Elbit Systems said on Tuesday it had boosted supplies to Israel's military due to the country's war with Hamas militants, as it reported higher quarterly profit.
Elbit, one of Israel's largest defense contractors, said that over the past six weeks, it has had to contend with 2,000 of its staff, or 15% of its workforce in Israel, being called for reserve duty and that has slightly disrupted its supply chain.
But deputy CEO Joseph Gaspar said Elbit has been round the clock to meet demand by Israel's military and other customers.
Israel's Defense Ministry had asked Elbit to increase quantities, make earlier deliveries of existing contracts and shift development programs for field use, he added.
"They are asking us to do that and we do our best of course to support it," he told Reuters.
"That actually accelerates the introduction of new products into the Army, Air Force etc ... Looking forward this will probably continue in the near future as well."
Still, more than 80% of Elbit's revenues are outside of Israel and Gaspar said it was working to ensure supplies are delivered from Israel and via subsidiaries in Europe, where one-third of sales are from, and the United States.
"We remain focused on maintaining our commitments to our customers around the world," said CEO Bezhalel Machlis.
Elbit supplies hundreds of products to Israel's Defense Ministry, including unmanned aerial vehicles (UAVs), artillery, munitions and electronic warfare systems.
Ramping up production
"Elbit Systems has ramped up its production in support of the Israel MOD and Israel's security forces," said Machlis.
In the third quarter, Elbit said it earned $1.65 per diluted share excluding one-time items, up from $1.40 per share a year earlier but lower than expectations of $1.70 based on LSEG data.
"Elbit Systems has ramped up its production in support of the Israel MOD and Israel's security forces."
CEO Bezhalel Machlis
Elbit's Nasdaq-listed shares fell 2.7% to $206.82.
Due to higher interest rates, financial expenses rose to $35.7 million, from $16.4 million a year earlier, while revenue increased to $1.5 billion from $1.35 billion, with aerospace revenue up 24%.
Elbit's board said the company would pay a dividend of 50 cents per share for the third quarter, the same as in the second quarter, to be paid on January 8.
Its orders backlog reached $16.6 billion, up nearly $2 billion over the past year, which Gaspar said would be "transformed into the revenue and eventually to the bottom line."
Through the first nine months, Elbit recorded revenue of $4.4 billion. Gaspar said it was on track to reach annual sales of $6.5-7 billion by early 2026, along with an operating margin of 10%.