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17 Nov 16. Elbit Systems Ltd. (NASDAQ and TASE: ESLT), (the “Company”) the international high technology company, reported today its consolidated results for the quarter ended September 30, 2016. Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “We are pleased with our financial results for the quarter, demonstrating growth and an improvement in profit. Our year-over-year increase in backlog of over six percent supports our ongoing revenue growth, as we have demonstrated in the first three quarters of this year. Additionally, we recorded a gain, for the second time this year, from a commercial spin-off business. This is a result of our efforts to adapt some of our technologies for civilian applications, around which we build viable companies. We look forward to reaping the fruits of these initiatives over the coming years.”
Third quarter 2016 results: Revenues in the third quarter of 2016 were $780.8m, as compared to $764.8m in the third quarter of 2015.
Non-GAAP(*) gross profit amounted to $238.1m (30.5% of revenues) in the third quarter of 2016, as compared to $233.5m (30.5% of revenues) in the third quarter of 2015. GAAP gross profit in the third quarter of 2016 was $230.4m (29.5% of revenues), as compared to $223.3m (29.2% of revenues) in the third quarter of 2015.
Research and development expenses, net were $65.6m (8.4% of revenues) in the third quarter of 2016, as compared to $61.0m (8.0% of revenues) in the third quarter of 2015.
Marketing and selling expenses, net were $60.9m (7.8% of revenues) in the third quarter of 2016, as compared to $60.6m (7.9% of revenues) in the third quarter of 2015.
General and administrative expenses, net were $36.1m (4.6% of revenues) in the third quarter of 2016, as compared to $36.4m (4.8% of revenues) in the third quarter of 2015.
Other operating income, net in the third quarter of 2016 amounted to $10.5m. The amount reflects a net gain related to valuation of shares in a newly established Israeli subsidiary due to a third party investment. The subsidiary, established in July 2016, is acting in the area of energy technology solutions for civilian transportation applications.
Non-GAAP(*) operating income was $77.9m (10.0% of revenues) in the third quarter of 2016, as compared to $80.3m (10.5% of revenues) in the third quarter of 2015. GAAP operating income in the third quarter of 2016 was $78.3m (10.0% of revenues), as compared to $65.3m (8.5% of revenues) in the third quarter of 2015.
Financial expenses, net were $7.3m in the third quarter of 2016, as compared to $6.1m in the third quarter of 2015.
Taxes on income were $8.9m (effective tax rate of 12.5%) in the third quarter of 2016, as compared to $10.3m (effective tax rate of 17.3%) in the third quarter of 2015. The lower effective tax rate in the third quarter of 2016 was mainly a result of prior years adjustments related to finalizing a tax assessment of a subsidiary. The tax rate was also affected by the mix of the tax rates in the various jurisdictions in which the Company’s entities generate taxable income.
Equity in net earnings of affiliated companies and partnerships was $1.4m in the third quarter of 2016, as compared to $1.7m in the third quarter of 2015. Net income attributable to non-controlling interests was $0.2m in the third quarter of 2016, as compared to $1.0m in the third quarter of 2015. Non-GAAP(*) net income attributable to the Company’s shareholders in the third quarter of 2016 was $62.5 m (8.0% of revenues), as compared to $62.3m (8.1% of revenues) in the third quarter of 2015. GAAP net income in the third quarter of 2016 was $63.4m (8.1% of revenues), as compared to $49.7m (6.5% of revenues) in the third quarter