Elbit Systems Awarded a $300 Million Contract to Supply Armored Vehicle Systems to a European Customer

Rhea-AI Summary

Elbit Systems Ltd. secures a $300 million contract to supply systems for armored vehicles to a European customer over six years, showcasing customer satisfaction and reinforcing market leadership.

Defense Industry Analyst

The contract awarded to Elbit Systems represents a significant development within the defense sector, particularly for a company specializing in the provision of advanced systems for armored vehicles. The size of the contract, approximately $300 million, is a substantial addition to Elbit's backlog and is likely to have a positive impact on the company's revenue stream over the designated six-year period.

Elbit's ability to secure such a contract indicates a robust competitive position in the market, likely due to its reputation for high-quality products and services. The inclusion of lifecycle maintenance and in-country support not only ensures a steady revenue flow but also strengthens the long-term relationship with the customer, which could lead to further contracts in the future.

Investors and stakeholders should note the potential for increased financial stability for Elbit Systems, as multi-year contracts provide predictable cash flows, which are favorable for strategic planning and investment in R&D for future growth.

Military Technology Expert

The announcement by Elbit Systems highlights the ongoing demand for integrated defense solutions in the armored vehicle market. The focus on weapon, reconnaissance, driving and situational awareness systems is indicative of modern warfare requirements, where enhanced capabilities can provide a significant tactical advantage.

Elbit's emphasis on custom design suggests a level of technical sophistication and flexibility that is highly valued by military customers. The ability to tailor solutions to specific operational needs is a key differentiator in the defense industry.

Furthermore, the contract's scope, encompassing not only production but also lifecycle maintenance, underscores the importance of long-term equipment reliability and serviceability in military procurement decisions. This holistic approach to defense solutions can be a decisive factor in winning contracts and maintaining a competitive edge.

Financial Analyst

From a financial perspective, Elbit Systems' new contract is likely to be accretive to earnings over the medium to long term. The contract's duration of six years provides a clear visibility of future earnings, which is beneficial for financial forecasting and valuation purposes.

However, investors should consider the timing of revenue recognition and the potential impact on the company's working capital, as defense contracts often involve significant upfront investments in production and development. It's also important to monitor the execution risks associated with such large-scale projects, including potential cost overruns and delays.

Given the contract's size relative to Elbit's overall business, it could potentially lead to upward revisions of revenue and earnings estimates by analysts, influencing the stock's performance. The contract may also serve as a positive signal to the market regarding Elbit's competitive position and its ability to win sizable international deals.

HAIFA, Israel, Feb. 20, 2024 /PRNewswire/ -- Elbit Systems Ltd. (NASDAQ: ESLT) (TASE: ESLT) ("Elbit Systems" or the "Company") announced today that it was awarded a contract in an amount of approximately $300 million to supply weapon, reconnaissance, driving, and situational awareness systems for approximately 230 armored vehicles, to a European customer. The contract will be performed over a period of six years and includes custom design, production, lifecycle maintenance and complete in-country support. 

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems: "This contract underscores the customer's high level of satisfaction for our systems and solutions already in service. It also reinforces Elbit Systems' leadership in the armored vehicle market, underpinned by our commitment to delivering cutting-edge solutions that meet the requirements of our customers."

About Elbit Systems

Elbit Systems Ltd. is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance ("C4ISR"), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios, cyber-based systems and munitions. The Company also focuses on the upgrading of existing platforms, developing new technologies for defense, homeland security and commercial applications and providing a range of support services, including training and simulation systems.

For additional information, visit: https://elbitsystems.com, follow us on Twitter or visit our official Facebook, Youtube and LinkedIn Channels.

Company Contact: 
Dr. Yaacov (Kobi) Kagan, ExecutiveVP - CFO
Tel:  +972-77-2946663
kobi.kagan@elbitsystems.com 

Rami Myerson, VP, Investor Relations
Tel: +972-77-2948984
rami.myerson@elbitsystems.com

Dalia Bodinger, VP, Communication & Brand
Tel: 972-77-2947602
dalia.bodinger@elbitsystems.com

This press release may contain forward–looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Israeli Securities Law, 1968) regarding Elbit Systems Ltd. and/or its subsidiaries (collectively the Company), to the extent such statements do not relate to historical or current facts. Forward-looking statements are based on management's current expectations, estimates, projections and assumptions about future events. Forward–looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions about the Company, which are difficult to predict, including projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business.  Therefore, actual future results, performance and trends may differ materially from these forward–looking statements due to a variety of factors, including, without limitation: scope and length of customer contracts; governmental regulations and approvals; changes in governmental budgeting priorities; general market, political and economic conditions in the countries in which the Company operates or sells, including Israel and the United States among others including the duration and scope of the current war in Israel, and the potential impact on our operations; changes in global health and macro-economic conditions; differences in anticipated and actual program performance, including the ability to perform under long-term fixed-price contracts; changes in the competitive environment; and the outcome of legal and/or regulatory proceedings. The factors listed above are not all-inclusive, and further information is contained in Elbit Systems Ltd.'s latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission. All forward–looking statements speak only as of the date of this release. Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company does not undertake to update its forward-looking statements.

Elbit Systems Ltd., its logo, brand, product, service and process names appearing in this Press Release are the trademarks or service marks of Elbit Systems Ltd. or its affiliated companies.  All other brand, product, service and process names appearing are the trademarks of their respective holders.  Reference to or use of a product, service or process other than those of Elbit Systems Ltd. does not imply recommendation, approval, affiliation or sponsorship of that product, service or process by Elbit Systems Ltd. Nothing contained herein shall be construed as conferring by implication, estoppel or otherwise any license or right under any patent, copyright, trademark or other intellectual property right of Elbit Systems Ltd. or any third party, except as expressly granted herein.

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SOURCE Elbit Systems Ltd.

FAQ

What contract did Elbit Systems Ltd. secure recently?

Elbit Systems Ltd. secured a contract worth approximately $300 million to supply weapon, reconnaissance, driving, and situational awareness systems for approximately 230 armored vehicles to a European customer.

What is the duration of the contract secured by Elbit Systems Ltd.?

The contract will be performed over a period of six years.

Who is the President and CEO of Elbit Systems Ltd.?

Bezhalel (Butzi) Machlis is the President and CEO of Elbit Systems Ltd.

What does the contract include?

The contract includes custom design, production, lifecycle maintenance, and complete in-country support for the armored vehicles.

What does the contract signify for Elbit Systems Ltd.?

The contract showcases the customer's high level of satisfaction for Elbit Systems' systems and solutions already in service, reinforcing the company's leadership in the armored vehicle market.