Elbit Systems wins large Australian Army deal

The $298 million contract over the next three years is for the company's BGC3 battle management system.

Defense electronics company Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) has won a $298 million (AU$331 million) Australia department of defense contract for a command and control system for the Australian Army.

Elbit Systems will supply, integrate, install, and support a Battle Group and Below Command, Control and Communications (BGC3) system for the Australian Army’s Land 75/125 program.

The BGC3 comprises a Battle Management System (BMS) for soldiers, vehicle mounted commanders, and headquarters/command post staff. It will enable the Australian Army to achieve a major portion of its defense network-centric warfare milestone of a networked brigade with cutting-edge technology in battle management and communications systems.

The contract will be filled over the next three years. The company won an international tender for the system.

Elbit Systems president and CEO Joseph Ackerman said, "Australia is a very important market for Elbit Systems, and we are extremely proud to be selected by the department of defense for this major program, one of the largest and most prestigious BMS programs in the world."

IBI analyst Gil Bashan said that this is really good news for Elbit Systems, which has not reported such a large new contract for a long time. while the market sees a sharp fall in the company's growth in 2010 to 2-3%, IBI expects Elbit Systems to grow by 5-6%, and this contract reinforces that position and reflects the strength of Elbit Systems. IBI also feels that the price of Elbit Systems's share is reasonable in relation to its profit potential. It gives a neutral recommendation of $66 per share.

Elbit Systems' share closed at $62.56 on Nasdaq yesterday, giving a market cap of $2.66 billion. The share rose 2.8% by midday today on the TASE to NIS 235.80.

Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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