Elbit Systems Gains on Satellite Contract Report: Tel Aviv Mover
Stock Chart for Elbit Systems Ltd (ESLT)
Elbit Systems Ltd. headed for the biggest gain in more than a month on a report a unit of Israel’s largest non-governmental defense company may secure a satellite deal valued at more than $100 million.
The shares increased 3 percent, set for the biggest advance since Dec. 31, to 143 shekels at 3:54 p.m. in Tel Aviv. Shares of the company that depends on its home country for 25 percent of revenue lost 4.7 percent last year, compared with an 11 percent gain for the S&P Aerospace & Defense Index as the company, struggled with falling sales to the U.S. and Europe.
ImageSat International NV, a provider of satellite earth- imagery with offices in Tel Aviv, may order an EROS satellite from Israel Aerospace Industries Ltd. and Elbit’s Elop Ltd. unit, daily Yedioth Ahronoth reported today, without saying from where it got the information. Talks are under way for a contract valued at more than $100 million, the paper reported in its print edition.
“The potential order is a positive for Elbit as it will add significant domestic deal flow to the backlog,” Zach Herzog, head of international sales at Psagot Investment House Ltd., said today by phone from Tel Aviv. “This follows other positive news, such as joint ventures in Brazil and India.”
Elbit, which got 51 percent of revenue from the U.S. and Europe in 2011 according to data compiled by Bloomberg, is hunting for new markets as American defense spending may be cut by about $500 billion over 10 years and as gross domestic product in the euro region stagnates amid a debt crisis. Shares of the Haifa, Israel-based Elbit have rebounded from their five- year low on Aug. 28 as the company received orders from the Israeli government and added Indian and Brazilian ventures to its operations.
The company said Feb. 7 a unit set up a joint venture with India’s Bharat Forge Ltd. to provide artillery and mortars systems to India’s Ministry of Defense and other customers. The company said earlier this month that its Brazilian unit signed an agreement with Embraer Defesa e Segurança SA to jointly pursue projects in the unmanned aircraft systems market. Elbit said in December it got $315 million in orders from the Israel’s Ministry of Defense.
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