Elbit Systems Ltd. (ESLT) Q3 2024 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 20 2024
0mins
Source: SeekingAlpha
Revenue $1.718 billion (14% increase from $1.502 billion in Q3 2023) due to strong demand across various segments, particularly in Land and Elbit Systems of America.
Gross Margin (Non-GAAP) 24.4% (decrease from 24.9% in Q3 2023) due to operational costs.
Gross Margin (GAAP) 24% (decrease from 24.5% in Q3 2023) attributed to increased operational expenses.
Operating Income (Non-GAAP) $140.7 million (8.2% of revenues, increase from $120 million or 8% of revenues in Q3 2023) due to revenue growth.
Operating Income (GAAP) $125.8 million (7.3% of revenues, increase from $106 million or 7.1% of revenues in Q3 2023) reflecting improved operational efficiency.
Net R&D Expenses $119.9 million (7% of revenues, increase from $103.3 million or 6.9% of revenues in Q3 2023) due to increased R&D efforts in the land segment.
Marketing and Selling Expenses $91.3 million (5.3% of revenues, increase from $86 million or 5.7% of revenues in Q3 2023) due to higher marketing efforts.
G&A Expenses $75.7 million (4.4% of revenues, decrease from $78.8 million or 4.8% of revenues in Q3 2023) due to cost management.
Financial Expenses $45 million (increase from $35.7 million in Q3 2023) due to elevated interest rates and increased working capital needs.
Tax Expense $12.8 million (increase from $10 million in Q3 2023) with an effective tax rate of 14.6%, consistent with Q3 2023.
Non-GAAP Diluted EPS $2.21 (increase from $1.71 in Q3 2023) reflecting strong revenue growth.
GAAP Diluted EPS $1.77 (increase from $1.36 in Q3 2023) indicating continued profitability.
Backlog of Orders $22.1 billion (increase of approximately $5.5 billion from Q3 2023) demonstrating strong future revenue potential.
Operating Cash Flow $83 million inflow (compared to $200 million outflow for the same period last year) indicating improved cash management.
Dividend Declared $0.50 per share, reflecting the company's commitment to returning value to shareholders.
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Analyst Views on ESLT
Wall Street analysts forecast ESLT stock price to fall
3 Analyst Rating
1 Buy
2 Hold
0 Sell
Moderate Buy
Current: 811.010
Low
531.00
Averages
553.67
High
580.00
Current: 811.010
Low
531.00
Averages
553.67
High
580.00
About ESLT
Elbit Systems Ltd. is an international technology company engaged in a range of programs across the world. The Company develops and supplies a portfolio of airborne, land, and naval systems and products for defense, homeland security, and commercial aviation applications. Its systems and products are installed on new platforms, and it also performs platform modernization programs. In addition, it provides a range of support services. The Company's activities include military aircraft and helicopter systems; helmet-mounted systems; commercial aviation systems and aerostructures; unmanned aircraft and unmanned surface vessels; land vehicle systems; command, control, communications, computer, and intelligence (C4I) systems; intelligence and cyber systems; electro-optic and countermeasure systems; electronic warfare and signal intelligence systems; and various commercial activities. It operates primarily in the defense and homeland security arenas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Defense Stocks Surge, Led by Elbit Systems
- Defense Sector Rally: On Thursday, defense stocks collectively rose by approximately 3.1%, indicating strong market confidence in the sector, likely driven by geopolitical tensions.
- Elbit Systems Leads: Elbit Systems saw its stock price increase by about 6.3%, positioning it as the leader among defense stocks, reflecting investor optimism regarding its future growth potential.
- Kratos Defense Growth: Kratos Defense & Security Solutions experienced a stock price rise of approximately 4.3%, showcasing its competitiveness and market recognition in the defense sector, which may attract more investor interest.
- Positive Market Sentiment: The robust performance of defense stocks could draw additional capital into the sector, further driving up the stock prices of related companies and enhancing market expectations for defense spending.
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- Funding Initiative: The Trump administration is reportedly negotiating with the Pentagon's Office of Strategic Capital to increase funding for U.S. drone manufacturers by approximately 1,247% in fiscal 2027, which is expected to significantly enhance the competitiveness and innovation capacity of the American drone industry.
- Market Growth Potential: According to MarketsandMarkets, the global counter-unmanned aircraft system market is projected to grow from approximately $6.64 billion in 2025 to around $20.31 billion by 2030, with North America expected to lead this growth, indicating strong demand for domestic manufacturers.
- Duke Robotics Uplisting: Duke Robotics successfully completed an underwritten public offering of approximately $9.2 million on May 18, 2026, and uplisted to Nasdaq, holding the intellectual property for the IDF-deployed Bird of Prey weapon system, which is anticipated to drive future revenue growth.
- Acquisitions and Mergers: Ondas Holdings completed its acquisition of Omnisys for approximately $196.6 million, enhancing its capabilities in multi-domain defense planning, while its merger with Mistral has brought its backlog to $457 million, demonstrating strong market consolidation capabilities.
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- Contract Details: Elbit Systems has secured a four-year contract worth approximately $350 million to upgrade Main Battle Tank systems, aimed at extending their service life and enhancing battle readiness, underscoring the company's leadership in global tank modernization.
- Financial Performance: The company reported first-quarter revenue of $2.19 billion, a 15.3% increase year-over-year, with adjusted earnings per share of $3.87, reflecting a 50.6% growth, driven by a surge in demand from the Israeli Ministry of Defense due to ongoing Middle Eastern conflicts.
- Backlog Growth: This contract contributes to Elbit's record backlog of $30.2 billion, indicating strong growth potential in the defense sector, particularly in light of the current global security landscape.
- Market Sentiment: Retail investor sentiment towards Elbit Systems has shifted from 'bullish' to 'extremely bullish', with the stock gaining over 40% year-to-date, reflecting strong market confidence in the company's future performance.
See More
Elbit Systems Secures $350M Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract valued at approximately $350 million from an international customer for Main Battle Tank upgrades, which not only enhances the company's revenue outlook but also solidifies its position in the defense market.
- System Integration Upgrades: The program includes the integration of advanced Fire Control Systems, Electric Gun & Turret Drive Systems, Communication and Situational Awareness solutions, as well as a Mid Life Upgrade package, aimed at extending the tanks' service life and enhancing combat readiness, thereby boosting the client's operational capabilities.
- Defined Execution Timeline: Under the contract, Elbit Systems will complete all upgrades over a four-year period, providing a stable revenue stream for the company and enhancing its long-term competitiveness in the defense sector.
- Strong Stock Performance: Elbit Systems' shares have risen by 43.4% year-to-date, reflecting strong market confidence in defense demand and indicating the company's resilience and potential in navigating industry challenges.
See More
Elbit Systems Secures $350 Million Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract valued at approximately $350 million from an international customer to upgrade Main Battle Tanks, expected to be completed over four years, which will significantly enhance the company's revenue and market position.
- System Modernization: The program will integrate advanced fire control systems, electric gun and turret drive systems, and communication solutions, enhancing the tanks' combat readiness and ensuring customers maintain battlefield superiority.
- Technological Innovation: The upgrades include lightweight, high-performance electro-optical sights with AI capabilities for day and night observation and target detection, further enhancing the combat effectiveness and survivability of the tanks.
- Long-term Support Assurance: The contract also covers the supply of spare parts and maintenance technical support to ensure long-term operational availability, demonstrating Elbit's leadership in the global defense market and commitment to customer needs.
See More
Elbit Systems Secures $350 Million Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract worth approximately $350 million from an international customer to upgrade Main Battle Tanks over a four-year period, indicating strong demand and competitiveness in the global defense market.
- System Modernization: The program will integrate advanced fire control systems, electric turret drive systems, and communication solutions aimed at extending the tanks' service life and enhancing combat readiness, thereby improving the operational capabilities of its customers.
- Technological Innovation: The upgrades include lightweight, high-performance electro-optical sights with AI capabilities for day and night observation, as well as advanced target detection and tracking, which significantly enhance the combat efficiency and survivability of the tanks, ensuring a decisive advantage on the battlefield.
- Long-term Support Assurance: The contract also covers the supply of spare parts and maintenance technical support to ensure long-term operational availability, reflecting Elbit Systems' commitment to customer needs and its capability to deliver comprehensive solutions in the defense sector.
See More
Defense Stocks Surge, Led by Elbit Systems
- Defense Sector Rally: On Thursday, defense stocks collectively rose by approximately 3.1%, indicating strong market confidence in the sector, likely driven by geopolitical tensions.
- Elbit Systems Leads: Elbit Systems saw its stock price increase by about 6.3%, positioning it as the leader among defense stocks, reflecting investor optimism regarding its future growth potential.
- Kratos Defense Growth: Kratos Defense & Security Solutions experienced a stock price rise of approximately 4.3%, showcasing its competitiveness and market recognition in the defense sector, which may attract more investor interest.
- Positive Market Sentiment: The robust performance of defense stocks could draw additional capital into the sector, further driving up the stock prices of related companies and enhancing market expectations for defense spending.
See More
Trump Administration Pushes Funding for Drone Manufacturing
- Funding Initiative: The Trump administration is reportedly negotiating with the Pentagon's Office of Strategic Capital to increase funding for U.S. drone manufacturers by approximately 1,247% in fiscal 2027, which is expected to significantly enhance the competitiveness and innovation capacity of the American drone industry.
- Market Growth Potential: According to MarketsandMarkets, the global counter-unmanned aircraft system market is projected to grow from approximately $6.64 billion in 2025 to around $20.31 billion by 2030, with North America expected to lead this growth, indicating strong demand for domestic manufacturers.
- Duke Robotics Uplisting: Duke Robotics successfully completed an underwritten public offering of approximately $9.2 million on May 18, 2026, and uplisted to Nasdaq, holding the intellectual property for the IDF-deployed Bird of Prey weapon system, which is anticipated to drive future revenue growth.
- Acquisitions and Mergers: Ondas Holdings completed its acquisition of Omnisys for approximately $196.6 million, enhancing its capabilities in multi-domain defense planning, while its merger with Mistral has brought its backlog to $457 million, demonstrating strong market consolidation capabilities.
See More
Elbit Systems Secures $350 Million Tank Upgrade Contract
- Contract Details: Elbit Systems has secured a four-year contract worth approximately $350 million to upgrade Main Battle Tank systems, aimed at extending their service life and enhancing battle readiness, underscoring the company's leadership in global tank modernization.
- Financial Performance: The company reported first-quarter revenue of $2.19 billion, a 15.3% increase year-over-year, with adjusted earnings per share of $3.87, reflecting a 50.6% growth, driven by a surge in demand from the Israeli Ministry of Defense due to ongoing Middle Eastern conflicts.
- Backlog Growth: This contract contributes to Elbit's record backlog of $30.2 billion, indicating strong growth potential in the defense sector, particularly in light of the current global security landscape.
- Market Sentiment: Retail investor sentiment towards Elbit Systems has shifted from 'bullish' to 'extremely bullish', with the stock gaining over 40% year-to-date, reflecting strong market confidence in the company's future performance.
See More
Elbit Systems Secures $350M Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract valued at approximately $350 million from an international customer for Main Battle Tank upgrades, which not only enhances the company's revenue outlook but also solidifies its position in the defense market.
- System Integration Upgrades: The program includes the integration of advanced Fire Control Systems, Electric Gun & Turret Drive Systems, Communication and Situational Awareness solutions, as well as a Mid Life Upgrade package, aimed at extending the tanks' service life and enhancing combat readiness, thereby boosting the client's operational capabilities.
- Defined Execution Timeline: Under the contract, Elbit Systems will complete all upgrades over a four-year period, providing a stable revenue stream for the company and enhancing its long-term competitiveness in the defense sector.
- Strong Stock Performance: Elbit Systems' shares have risen by 43.4% year-to-date, reflecting strong market confidence in defense demand and indicating the company's resilience and potential in navigating industry challenges.
See More
Elbit Systems Secures $350 Million Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract valued at approximately $350 million from an international customer to upgrade Main Battle Tanks, expected to be completed over four years, which will significantly enhance the company's revenue and market position.
- System Modernization: The program will integrate advanced fire control systems, electric gun and turret drive systems, and communication solutions, enhancing the tanks' combat readiness and ensuring customers maintain battlefield superiority.
- Technological Innovation: The upgrades include lightweight, high-performance electro-optical sights with AI capabilities for day and night observation and target detection, further enhancing the combat effectiveness and survivability of the tanks.
- Long-term Support Assurance: The contract also covers the supply of spare parts and maintenance technical support to ensure long-term operational availability, demonstrating Elbit's leadership in the global defense market and commitment to customer needs.
See More
Elbit Systems Secures $350 Million Tank Upgrade Contract
- Significant Contract Value: Elbit Systems has secured a contract worth approximately $350 million from an international customer to upgrade Main Battle Tanks over a four-year period, indicating strong demand and competitiveness in the global defense market.
- System Modernization: The program will integrate advanced fire control systems, electric turret drive systems, and communication solutions aimed at extending the tanks' service life and enhancing combat readiness, thereby improving the operational capabilities of its customers.
- Technological Innovation: The upgrades include lightweight, high-performance electro-optical sights with AI capabilities for day and night observation, as well as advanced target detection and tracking, which significantly enhance the combat efficiency and survivability of the tanks, ensuring a decisive advantage on the battlefield.
- Long-term Support Assurance: The contract also covers the supply of spare parts and maintenance technical support to ensure long-term operational availability, reflecting Elbit Systems' commitment to customer needs and its capability to deliver comprehensive solutions in the defense sector.
See More
