The shares increased 3 percent, the most since Dec. 31, to 144.3 shekels at the close in Tel Aviv, compared with a 0.1 percent drop for the benchmark TA-25 Index. Shares have declined 3.3 percent this year as the company struggles with reduced defense spending in the U.S. and Europe. The S&P Aerospace & Defense Index has added 8.2 percent in the same period.
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. The company reported a 0.2 percent gain in fourth-quarter revenue to $844 million, compared with two estimates of $843 million and $842 million compiled by Bloomberg.
“Considering declining budgets and intensifying competition in the growth regions, even low-digit growth is an achievement,” Ella Fried, a senior analyst at Bank Leumi Le- Israel Ltd. in Tel Aviv said today by phone. “We do not expect a jump in growth in 2013 and no significant acquisitions.”
Profit for the quarter rose to $57.2 million from a loss of $13 million in the year-earlier period when the company reported a one-time expense, the company said.
Shares of 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 in February a unit set up a joint venture with Pune, India’s Bharat Forge Ltd. (BHFC) to provide artillery and mortars systems to India’s Ministry of Defense and other customers. The company also said last month 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.
“I don’t see a drop in the flow of orders in 2013,” Joseph Ackerman, outgoing Elbit chief executive officer, said at a press conference in Tel Aviv today, adding that sales to India, Brazil and Australia will offset a drop in sales to the U.S.
Growth engines for the company over the next decade will include cyber-defense, civilian and the simulators sectors, Ackerman said. The company is constantly seeking mergers and acquisitions, he said, with “the next growth spurt coming with the next acquisition.”
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