Israeli defense electronics powerhouse, Elbit Systems, is riding high on the aftermath of the Israel-Hamas conflict, with expectations of continued sales growth this year. Following a surge in fourth-quarter revenue driven by heightened ammunition sales to Israel during the conflict, the company remains optimistic about its future prospects.
Despite a slight dip of 8% in quarterly earnings compared to the previous year, attributed to one-off charges from a discontinued project, revenue climbed from $1.5 billion to $1.6 billion. Joseph Gaspar, the company’s finance chief, highlighted Elbit’s shift in priorities during the conflict, ramping up supplies to the Israeli military while seeking flexibility from international clients to accommodate increased local demand.
As one of Israel’s major defense entities, Elbit derives 80% of its sales from overseas markets. Its order backlog surged to $17.8 billion in 2023, up from $15.1 billion in the previous year. The company’s diverse product portfolio includes unmanned aerial vehicles (UAVs), artillery, munitions, and electronic warfare systems, supplied to Israel’s Defense Ministry.
With a workforce expansion of 1,000 in 2023 and plans to hire an additional 2,000 employees in 2024, Elbit reflects its ambitious growth trajectory. Despite challenges in the supply chain, exacerbated by global disruptions, the company leverages its 42 subsidiaries worldwide to mitigate these issues.
Elbit’s CEO, Bezhalel Machlis, emphasized the significance of supporting the Israel Defense Forces (IDF), noting the influx of orders during the conflict. Sales to Israel, currently standing at approximately $1.2 billion annually, are expected to rise with the government’s approval of increased defense spending, projected at an additional $5.5 billion per year.
Machlis anticipates a revenue boost of at least $500 million annually from Israel alone, reflecting a growing global demand for Elbit’s technology. Revenue projections for the period between 2024 and 2026 range from $6.5 billion to $7 billion.
Elbit’s resilience amid supply chain challenges and its strategic expansion efforts are reflected in its stock performance. While its Tel Aviv-listed shares saw a 1.1% increase in afternoon trading, the company remains optimistic about its future growth prospects.
Furthermore, Elbit announced its commitment to shareholder returns by declaring a quarterly dividend of 50 cents per share.
