Elbit Systems (NASDAQ:ESLT) Posts Quarterly Earnings Results, Beats Expectations By $0.45 EPS

Key Points

• Elbit Systems beat quarterly expectations: EPS came in at $4.14, $0.45 above consensus, while revenue reached $2.29 billion, up 15.9% year over year and slightly ahead of estimates.
• Record backlog supports future growth: Backlog rose 34% to $32 billion, driven by strong international demand and major European, Greek, and U.S. defense contracts.
• Capacity expansion is accelerating, with planned internally funded capital investments increased to approximately $300 million for production, robotics, and AI. However, higher global-minimum-tax expenses and an 8% decline in Aerospace revenue were notable headwinds.

Elbit Systems (NASDAQ:ESLT - Get Free Report) announced its quarterly earnings results on Tuesday. The aerospace company reported $4.14 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.69 by $0.45, FiscalAI reports. The business had revenue of $2.29 billion for the quarter, compared to the consensus estimate of $2.25 billion. Elbit Systems had a return on equity of 16.15% and a net margin of 7.14%.

Here are the key takeaways from Elbit Systems' conference call:

• Elbit reported strong second-quarter growth, with revenue up 15.9% year over year to $2.29 billion, non-GAAP operating margin expanding to 10.4%, and non-GAAP diluted EPS rising 28% to $4.14.
• Backlog reached a record $32 billion, up 34% year over year, with 73% generated outside Israel and approximately 42% scheduled for delivery through 2027, providing significant revenue visibility.
• Management cited robust international demand, particularly in Europe and the U.S., supported by major awards including a $1.4 billion European modernization program, a $750 million Greek PULS contract, and U.S. awards totaling hundreds of millions of dollars.
• The company increased internally funded capital investment plans from $220 million to approximately $300 million to expand production, robotics, and AI capabilities; management also said customers are increasingly matching or fully funding capacity investments.
• Higher taxes, primarily from OECD Pillar Two global minimum-tax rules, lifted the effective tax rate to 16.4% from 5.6% a year earlier, while Aerospace revenue declined 8% due to unfavorable project mix and weaker European training and simulation sales.

Elbit Systems Price Performance

Shares of ESLT stock traded down $62.63 during midday trading on Tuesday, reaching $783.41. 83,472 shares of the company were exchanged, compared to its average volume of 132,130. Elbit Systems has a 12 month low of $432.85 and a 12 month high of $1,016.06. The company has a market cap of $34.82 billion, a P/E ratio of 63.47, a PEG ratio of 3.65 and a beta of 0.17. The company's 50 day moving average price is $796.99 and its two-hundred day moving average price is $808.39. The company has a debt-to-equity ratio of 0.06, a quick ratio of 0.86 and a current ratio of 1.41.

Elbit Systems Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Monday, July 6th. Shareholders of record on Tuesday, June 23rd were given a dividend of $1.00 per share. This represents a $4.00 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date was Tuesday, June 23rd. Elbit Systems's payout ratio is 26.96%.

Analysts Set New Price Targets

A number of research firms have issued reports on ESLT. JPMorgan Chase & Co. raised their target price on Elbit Systems from $930.00 to $950.00 and gave the company a "neutral" rating in a research note on Wednesday, May 27th. Zacks Research lowered shares of Elbit Systems from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, June 24th. Jefferies Financial Group dropped their price objective on shares of Elbit Systems from $950.00 to $880.00 and set a "hold" rating on the stock in a report on Wednesday, June 24th. Finally, Morgan Stanley set a $845.00 price objective on shares of Elbit Systems in a research report on Wednesday, July 15th. Two equities research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of "Hold" and a consensus price target of $803.75.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the stock. Wexford Capital LP acquired a new stake in Elbit Systems in the third quarter worth approximately $63,000. Greenline Wealth Management LLC bought a new stake in shares of Elbit Systems in the 4th quarter worth $85,000. Arax Advisory Partners lifted its holdings in shares of Elbit Systems by 25.0% in the fourth quarter. Arax Advisory Partners now owns 150 shares of the aerospace company's stock valued at $87,000 after buying an additional 30 shares during the period. Gen Wealth Partners Inc lifted its holdings in shares of Elbit Systems by 72.0% in the fourth quarter. Gen Wealth Partners Inc now owns 160 shares of the aerospace company's stock valued at $92,000 after buying an additional 67 shares during the period. Finally, EverSource Wealth Advisors LLC boosted its stake in Elbit Systems by 57.8% during the second quarter. EverSource Wealth Advisors LLC now owns 232 shares of the aerospace company's stock valued at $104,000 after buying an additional 85 shares in the last quarter. Institutional investors and hedge funds own 17.88% of the company's stock.

About Elbit Systems

Elbit Systems Ltd. is an Israel-based defense electronics company that designs, develops and supplies a broad range of systems for military, homeland security and commercial aviation customers. The company focuses on integrated, platform-level solutions that combine sensors, communications, command-and-control software and weapons integration to support intelligence, surveillance and reconnaissance (ISR), force protection and mission management.

Its product and service portfolio spans unmanned aircraft systems, electro-optic and signal intelligence systems, electronic warfare and communications equipment, avionics and mission systems for military and commercial aircraft, and land and naval systems.

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