Elbit Systems Awarded Approximately $190 Million Contract to Supply Iron Sting Guided Mortar Munition to the Israeli Ministry of Defense

Rhea-AI Summary

Elbit Systems (NASDAQ: ESLT) has secured a contract worth approximately $190 million to supply its Iron Sting laser and GPS-guided mortar munition to the Israeli Ministry of Defense. The contract will be executed over a 2-year period. Iron Sting is a precision-guided 120mm mortar munition with a range of up to 10 kilometers, featuring immune GPS and laser guidance technology. It includes a multi-mode fuze with various detonation options and a loading time of about 15 seconds.

Yehuda Vered, General Manager of Elbit Systems Land, emphasized the company's position as a market leader in precision-guided solutions, highlighting the increasing demand for accurate technologies in urban military conflicts to minimize collateral damage.

Positive

• Secured a $190 million contract with the Israeli Ministry of Defense
• Contract to be performed over 2 years, providing steady revenue
• Demonstrates market leadership in precision-guided munitions
• Addresses growing demand for accurate technologies in urban warfare

Negative

• None.

Defense Industry Analyst

The $190 million contract awarded to Elbit Systems for the Iron Sting guided mortar munition is a significant development in the defense sector. This deal underscores the growing demand for precision-guided weapons in modern warfare, particularly in urban environments where minimizing collateral damage is crucial.

The Iron Sting's combination of laser and GPS guidance technology represents a notable advancement in mortar munitions. With a range of up to 10 kilometers and multiple fuze options, it offers military forces enhanced flexibility and accuracy in various combat scenarios. The short loading time of 15 seconds also suggests improved operational efficiency.

For Elbit Systems, this contract solidifies its position in the precision-guided munitions market. It's likely to have a positive impact on the company's revenue stream over the next two years and could lead to further contracts, both domestically and internationally. However, investors should consider the potential for increased scrutiny and ethical concerns surrounding advanced weapons systems, which could impact future business opportunities.

From a broader industry perspective, this contract signals a continued trend towards smart munitions in military modernization efforts. It may spur competitors to accelerate their R&D in similar technologies, potentially leading to a more competitive market landscape in the coming years.

Financial Analyst

The $190 million contract represents a substantial win for Elbit Systems, likely to have a positive impact on its financial performance. To put this in context, Elbit's revenue for Q1 2023 was $1.39 billion, so this contract alone could account for roughly 13.7% of a typical quarter's revenue over its two-year duration.

Investors should note several key financial implications:

• Revenue Visibility: The contract provides clear revenue visibility for the next two years, which can be attractive to investors seeking stability.
• Profit Margins: Given the high-tech nature of the Iron Sting system, this contract likely carries favorable profit margins, potentially boosting Elbit's overall profitability.
• Cash Flow: The structure of defense contracts often involves advance payments, which could positively impact Elbit's cash flow position.

However, it's important to consider potential risks, such as project execution challenges or geopolitical factors that could affect contract fulfillment. Additionally, while this contract is significant, investors should assess it in the context of Elbit's overall order backlog and long-term growth strategy.

Given Elbit's dual listing on NASDAQ and TASE, this news might influence trading on both exchanges. Investors should monitor for any short-term stock price movements in response to this announcement, while keeping in mind the longer-term implications for Elbit's market position and financial health.

HAIFA, Israel, July 29, 2024 /PRNewswire/ -- Elbit Systems Ltd. (NASDAQ: ESLT) (TASE: ESLT) ("Elbit Systems" or the "Company") announced today that it was awarded a contract worth approximately $190 million to supply its Iron Sting laser and GPS-guided mortar munition to the Israeli Ministry of Defense. The contract will be performed over a period of 2 years.

Iron Sting is a precision-guided mortar munition, launched from a 120mm mortar, designed to accurately target and destroy objectives, utilizing both immune GPS and laser guidance technology. It has a range of up to 10 kilometers. Iron Sting features a multi-mode fuze with Point Detonation (PD), Point Detonation Delay (PDD), and Proximity Sensor (PRX) operating modes. The loading time is approximately 15 seconds.

Yehuda (Udi) Vered, General Manager of Elbit Systems Land: "Following the combat experience our cutting-edge guided mortar munition has accumulated, this contract further cements our position as a market leader in precision-guided solutions. With the rise of military conflicts in urban environments, armed forces around the world demand accurate technologies that minimize collateral damage. Elbit Systems' Iron Sting meets this critical need."

About Elbit Systems

Elbit Systems is a leading global defense technology company, delivering advanced solutions for a secure and safer world. Elbit Systems develops, manufactures, integrates and sustains a range of next-generation solutions across multiple domains.

Driven by its agile, collaborative culture, and leveraging Israel's technology ecosystem, Elbit Systems enables customers to address rapidly evolving battlefield challenges and overcome threats.

Elbit Systems employs over 19,000 people in dozens of countries across five continents. The Company reported as of March 31, 2024 approximately $1.6 billion in revenues and an order backlog of $20.4 billion.

For additional information, visit: https://elbitsystems.com, follow us on Twitter or visit our official Facebook, Youtube and LinkedIn Channels.

Company Contact:  

Dr. Yaacov (Kobi) Kagan, Executive VP - CFO
Tel:  +972-77-2946663
kobi.kagan@elbitsystems.com 

Dr. David Ravia, Investor Relations
Tel: +972-77-2947169
david.ravia@elbitsystems.com

Dalia Bodinger, VP, Communication & Brand
Tel: 972-77-2947602
dalia.bodinger@elbitsystems.com

This press release may contain forward–looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Israeli Securities Law, 1968) regarding Elbit Systems Ltd. and/or its subsidiaries (collectively the Company), to the extent such statements do not relate to historical or current facts. Forward-looking statements are based on management's current expectations, estimates, projections and assumptions about future events. Forward–looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions about the Company, which are difficult to predict, including projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business.  Therefore, actual future results, performance and trends may differ materially from these forward–looking statements due to a variety of factors, including, without limitation: scope and length of customer contracts; governmental regulations and approvals; changes in governmental budgeting priorities; general market, political and economic conditions in the countries in which the Company operates or sells, including Israel and the United States, among others, including the duration and scope of the current war in Israel, and the potential impact on our operations; changes in global health and macro-economic conditions; differences in anticipated and actual program performance, including the ability to perform under long-term fixed-price contracts; changes in the competitive environment; and the outcome of legal and/or regulatory proceedings. The factors listed above are not all-inclusive, and further information is contained in Elbit Systems Ltd.'s latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission. All forward–looking statements speak only as of the date of this release. Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company does not undertake to update its forward-looking statements.

Elbit Systems Ltd., its logo, brand, product, service and process names appearing in this release are the trademarks or service marks of Elbit Systems Ltd. or its affiliated companies.  All other brand, product, service and process names appearing are the trademarks of their respective holders.  Reference to or use of a product, service or process other than those of Elbit Systems Ltd. does not imply recommendation, approval, affiliation or sponsorship of that product, service or process by Elbit Systems Ltd. Nothing contained herein shall be construed as conferring by implication, estoppel or otherwise any license or right under any patent, copyright, trademark or other intellectual property right of Elbit Systems Ltd. or any third party, except as expressly granted herein.

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SOURCE Elbit Systems Ltd.

FAQ

What is the value of Elbit Systems' new contract for Iron Sting munitions?

Elbit Systems (ESLT) has been awarded a contract worth approximately $190 million to supply Iron Sting guided mortar munitions to the Israeli Ministry of Defense.

What are the key features of Elbit Systems' Iron Sting mortar munition?

Iron Sting is a 120mm precision-guided mortar munition with a range of up to 10 kilometers, utilizing immune GPS and laser guidance technology. It features a multi-mode fuze and has a loading time of about 15 seconds.

How long will it take Elbit Systems (ESLT) to fulfill the Iron Sting contract?

The contract for Iron Sting guided mortar munitions will be performed by Elbit Systems over a period of 2 years.

What market need does Elbit Systems' Iron Sting address?

Iron Sting addresses the growing demand for accurate technologies in urban military conflicts that minimize collateral damage, as highlighted by Elbit Systems Land's General Manager.