Elbit Systems Ltd announced on 14 August 2024, its financial results for the second quarter of 2024, ending 30 June, showing solid growth across several key metrics. The company’s revenue for the quarter increased by 12% year-over-year to $1.63bn, up from $1.45bn in the same quarter of 2023.
The company’s gross profit reached $389.7m, representing 24.0% of revenues, a slight decrease from the 25.6% margin recorded in Q2 2023. This was despite increased research and development (R&D) expenditure, which rose to $116.8m, accounting for 7.2% of revenues.
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In light of the ongoing military conflict in Gaza, Elbit Systems has experienced an increase in demand for its products from the Israel Ministry of Defence. While some operations have faced disruptions, the company has implemented measures to ensure business continuity and maintain production capabilities.
Elbit Systems remains cautiously optimistic about future growth, with its strong order backlog and continued investments in R&D positioning the company well to navigate the evolving defence landscape. “Our long-term investments in technologies, research and development in collaboration with our key customers, and the expansion of our manufacturing capabilities, enable us to meet our commitments to our customers and to drive the continued growth and focus on profitability of the Company, in alignment with our strategic goals,” said Bezhalel Machlis, President and CEO of Elbit Systems.
Elbit’s diversified portfolio continued to drive performance, with notable growth in its Land segment, which saw a 37% increase in revenue due to heightened ammunition and munition sales in Israel. The C4I and Cyber segment grew by 11%, largely driven by increased sales of radio systems. Similarly, the ISTAR and EW segment reported a 9% growth, supported by strong demand for Electronic Warfare and Electro-Optic systems in Israel and the Asia-Pacific region. The Elbit Systems of America segment also contributed with an 11% revenue increase, particularly in the Maritime and Warfighter systems sectors.
Operating income for the quarter was $116.5m, equivalent to 7.2% of revenues, up from $101.6m in the previous year. Financial expenses were slightly reduced to $29.1m, down from $32.1m in Q2 2023.
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By GlobalDataNet income attributable to shareholders grew to $78.4m, or $1.76 per diluted share, compared to $62.4m, or $1.40 per diluted share, in Q2 2023. On a non-GAAP basis, net income was $92.7m, or $2.08 per diluted share, reflecting Elbit’s ongoing focus on operational efficiency.
Elbit’s order backlog stood at $21.1bn as of 30 June 2024, with approximately 69% of these orders originating from outside Israel. The company anticipates that 43% of this backlog will be fulfilled by the end of 2025.
Cash flow from operations showed significant improvement, with $26.0m generated in the first half of 2024, compared to a cash outflow of $210.7m during the same period in 2023. This turnaround was mainly attributed to the increase in contract liabilities, offsetting the rise in inventories and trade receivables.
