After a 27% drop in its share price since January, Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) today announced a buyback of up to one million shares over the next 12 months on the open market on the TASE. The company did not did state the amount of the buyback, but on the basis of today's opening price on the TASE of NIS 135 per share, the buyback will amount to NIS 135 million.
Elbit Systems' share price rose 4.1% by mid-afternoon on the TASE to NIS 144.10, following the announcement. The share price fell 1.5% on Nasdaq on Friday to $36.59, giving a market cap of $1.56 billion.
Elbit Systems said, "The timing of any repurchases will be determined based on evaluation of market conditions and other factors, including share price and other corporate and regulatory requirements."
The buyback comes amid optimism on the company's part about for the second half of the year. Last month, after the release of the financial report for the second quarter, Elbit Systems president and CEO Joseph Ackerman said, "The second half of the year will be better by every measure, both in terms of revenue growth and profit margins."
The defense electronics company is controlled by Michael Federmann. Its revenue rose 14.6% to $691.6 million for the second quarter, driven by both organic growth and acquisitions. However, the company's net profit fell 13.2% to $38.9 million.
Elbit Systems' orders backlog rose 1% to $5.65 billion at the end of June, of which 62% is for export through the end of 2012. The company announced two contracts worth tens of millions of dollars in the past month.
Published by Globes [online], Israel business news - www.globes-online.com - on September 26, 2011
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