Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) reported lower profits for the fourth quarter of 2011, due to cancelled contracts with Turkey, in line with the company's warning in February. Despite the lost Turkish contracts, Elbit Systems' orders backlog rose to $5.53 billion at the end of 2011 from $5.45 billion a year earlier. 78% of the orders backlog is for export, and 72% will be delivered in 2012-13.
Full-year revenue rose to $2.82 billion in 2011 from $2.67 billion in 2010. The increase was driven by sales of airborne systems, thanks in part to the acquisition of M7 Aerospace and C4ISR systems, which were partly offset by lower sales of electro-optical systems for reconnaissance night vision.
GAAP-based net profit was halved to $90.3 million ($2.09 per share) in 2011 from $183.5 million in 2010, and non-GAAP net profit fell to $206.6 million ($4.79) from $221.9 million. The company beat the analysts' consensus of $4.74 earnings per share on $2.75 billion revenue
R&D expenses rose to $241.1 million in 2011, (8.6% of revenue) from $234.1 million in 2010.
Fourth quarter revenue rose 5% to $841.9 million from $798.7 million for the corresponding quarter of 2010. GAAP-based net loss was $13 million ($0.31 per share), compared with a GAAP-based net profit of $43.7 million for the corresponding quarter. Non-GAAP net profit fell to $60.6 million ($1.41) from $70.8 million. The company beat the analysts' consensus of $1.29 earnings per share on $767.9 million revenue.
Elbit Systems pointed out that the non-GAAP net profit does not include the impact from the cancellation of Turkish contracts at the order of the Israeli government.
Cash flow from operations rose to $190.9 million in 2011 from $186 million in 2010.
Elbit Systems president and CEO Joseph Ackerman said, "During the fourth quarter we were presented with some challenges which impacted on our margins and profitability. Looking ahead, we see some pricing pressure in our markets due to reduction in defense budgets in some of the developed markets in which we operate." He is optimistic for the company's strategic, operational, and financial future, citing the company's investment in R&D.
Elbit Systems' share price fell 1.5% in morning trading on the TASE today to NIS 134.80, after rising 1.6% on Nasdaq yesterday to $36.25, giving a market cap of $1.55 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2012
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