Israel's Elbit Systems predicts jump in global defence spending

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Logo of Israeli defence electronics firm Elbit Systems is seen at their offices in Haifa, Israel February 26, 2017. REUTERS/Baz Ratner

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March 29 (Reuters) - Israeli defence electronics company Elbit Systems (ESLT.TA) expects record sales in the next few years, with the Russia-Ukraine conflict helping to drive up defence budgets worldwide.

Elbit suffered a dip in fourth-quarter earnings, but 2021 as a whole produced full-year earnings per share up 15% at $8.30 on revenue that grew to $5.3 billion from $4.7 billion in 2020.

"Based on the current conflict in Ukraine, we see growing demands in several domains ... we also see growing budgets all over the world for defence spending," CEO Bezhalel Machlis told Reuters after the company published fourth-quarter results on Monday.

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"So I’m quite sure this record year 2021 is just the beginning for additional record years in the near future."

Fourth-quarter earnings per diluted share were $2.14 excluding one-time items, down from $2.38 a year earlier, Elbit said, citing higher tax payments.

Revenue rose to $1.49 billion from $1.38 billion.

The company's board declared a dividend of $0.50 per share for the fourth quarter, to be paid on April 25.

Shares in Israel's largest publicly traded defence contractor were down 5.2% on Tuesday but they are up a hefty 36% so far this year.

"Should such share price levels continue, or further increase, there would be a significant impact on the costs to the company under its various stock price-linked compensation plans for employees," it said.

Elbit said its backlog of orders reached $13.66 billion at the end of 2021, up from $11.02 a year earlier. About 72% of that comes from orders outside Israel, with 60% due in 2022 and 2023.

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Reporting by Ari Rabinovitch and Steven Scheer Editing by David Goodman

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