UPDATE 1-Elbit Systems rising backlog points to future revenue growth

Tue May 13, 2014 5:27am EDT

* Q1 adjusted EPS $1.22 vs $1.07 forecast

* Q1 revenue $682.6 mln vs $697.2 mln forecast

* To pay dividend of $0.32 for Q1 vs $0.30 for Q4 (Adds comments from CEO, share reaction, background)

By Tova Cohen

TEL AVIV, May 13 (Reuters) - A strong increase in Elbit System's orders backlog signals growth in 2014, its chief executive said on Tuesday after the Israeli defence electronics firm posted first-quarter profit that topped analysts' estimates.

Elbit, Israel's largest publicly traded defence company by revenue and market value, said its backlog of orders rose to $6.06 billion at the end of March - the first time it surpassed $6 billion - from $5.78 billion a year earlier.

"We started the year on the right foot. We see growth in our backlog, which signals the trend and forecasts the future," Bezhalel Machlis, who took over as CEO a year ago, told Reuters.

Latin America and Asia Pacific were particularly strong markets for the company but Elbit also won new orders in Europe, which had been flat in previous quarters, and the United States, where it was awarded a homeland security contract to deploy border surveillance technology in Arizona.

Elbit reported new orders worth over $800 million since the beginning of 2014.

Outlays on large defence platforms by governments around the world have slowed in recent years but Elbit specialises in some niche segments that are in demand. These include cyber security, intelligence, homeland security, unmanned air vehicles and electronics.

"We are in the right areas of business that the world needs now," Machlis said.

The company earned $1.22 per diluted share excluding one-time items in the first quarter, unchanged from a year earlier. Revenue rose to $682.6 million from $680.2 million.

Elbit was forecast to earn $1.07 a share on revenue of $697.2 million, according to Thomson Reuters I/B/E/S.

Elbit's shares were up 0.9 percent to 214.5 shekels in midday trade in Tel Aviv.

Machlis said in March he saw potential for $2-$3 billion of new orders in Latin America in the next three years, as well as $2-$3 billion in Australia and $3-$4 billion in India.

Elbit declared a dividend of 32 cents per share for the first quarter, up from 30 cents for the fourth quarter.

($1 = 3.45 shekels) (Reporting by Tova Cohen; Editing by Steven Scheer)