Israeli defence contractor Elbit Systems has released its second-quarter (Q2) 2019 earnings report showing a 19% increase in revenue compared with Q2 2018.
The earnings report shows revenues for Q2 2019 at $1.6bn up from $892m in Q2 2018. The company also saw a rise in its gross profit margin to $294m from $255m.
Elbit Systems president and CEO Bezhalel Machlis said: “We are pleased with the results of the second quarter, with an ongoing increase in backlog as well as solid revenue growth of over 19%, diversified across all our main regions of business.”
Elbit and its subsidiaries work in a number of countries including Israel and the US, serving a variety of contracts across the globe.
The rise in profits was partly due to the company’s acquisition of rival Israeli defence contractor IMI Systems, a prime contractor to the Israel Defence Forces (IDF), in a $500m deal. IMI manufactures weapons, munitions and systems for the IDF.
Machlis added: “We are also encouraged that, with the IMI consolidation, our ongoing focus on efficient operations enabled us to maintain a similar level of operating margins to that of the second quarter last year.
“We continue to integrate and extract synergies from all our recent acquisitions and are looking forward to further growth of our business.”
Machlis said at the time of the acquisition: “The synergy between the capabilities of the two companies and the global positioning of Elbit Systems will enable us to offer an enhanced portfolio and to realise the potential of the technologies of IMI in the international arena, making this acquisition significant to our long-term growth strategy.”
“Elbit Systems has a proven track record of successfully performing major acquisitions, and I am convinced that this acquisition will be beneficial for Israel’s economy, for both companies’ employees and customers and for our shareholders.”
In Q2 Elbit spent $77m on research and development with another $73m spent on marketing and sales.
Elbit’s’ earnings report details a large backlog of order worth $9.7bn as of June 2019, up from $8bn on last year.
The report reads: “Approximately 60% of the current backlog is attributable to orders from outside Israel. Approximately 56% of the current backlog is scheduled to be performed during the second half of 2019 and 2020.
Elbit Systems produces a range of systems for military purposes from C4ISR solutions, unmanned aerial systems (UAS), Artillery and Land Equipment.