Israeli defence electronics specialist Elbit Systems reported higher quarterly profit on Tuesday and said it expects its night-vision business and other acquired operations to prosper as global defence spending continues to rise.
The company's U.S. business last year won a U.S. Army contract for enhanced night-vision systems that use thermal imaging and augmented reality, with the deal worth up to $442 million.
Elbit Systems of America in 2019 bought the night-vision business of L3Harris Technologies for $350 million and has also won German and Dutch military deals.
"It has been a big success," Elbit Chief Executive Bezhalel Machlis told Reuters after reporting increased first-quarter profit and revenue. "We expect hundreds of millions of dollars in additional contracts in this area."
Machlis said that defence spending is growing but Elbit is still suffering from the COVID-19 pandemic because there are no air shows to showcase its equipment, increasing its reliance on dialogue through its global subsidiaries.
He said that Elbit, which has operations in Israel, Europe, North America, South America and the Asia-Pacific region, is benefiting from "many countries utilising defence spending in order to create jobs and to support their economies".
Elbit in April bought Florida-based Sparton Corp for $380 million to gain a foothold in the naval sector. Finance chief Joseph Gaspar said Sparton should provide $60 million in quarterly revenue and contribute to profits in 2022.
Since December, Elbit has won contracts worth more than $1 billion to supply defence equipment and a $1.65 billion contract for the establishment and operation of a training centre for the Hellenic Air Force.
The maker of drones, pilot helmet displays and cyber security systems said it earned $1.72 per diluted share in the first quarter, up from $1.63 a year earlier. Revenue rose to $1.12 billion from $1.07 billion.
Its order backlog rose to a record $11.8 billion at the end of the quarter, against $10.8 billion a year earlier.
"The funnel of opportunities has never been so large, and we see many opportunities ahead of us," Machlis said. "The big growth in the backlog will translate into profits in the coming years. So, the company is growing organically and we still look for new acquisitions."
Elbit declared a dividend of 44 cents per share for the first quarter, unchanged from the previous quarter.