Shares of Elbit Systems Ltd (NASDAQ: ESLT) surged 6.99% in pre-market trading on Wednesday, following a trifecta of positive news that boosted investor confidence in the Israeli defense technology company.
The company reported impressive second-quarter results, with adjusted earnings per share of $3.23, significantly beating the analyst consensus estimate of $2.57. This represents a 55.29% increase from the same period last year. Quarterly sales also exceeded expectations, coming in at $1.973 billion, up 21.33% year-over-year and surpassing the estimated $1.889 billion.
Adding to the positive momentum, Elbit Systems announced a substantial new contract worth $1.64 billion to provide defense services to an unnamed European country over a five-year period. The contract includes long-range precision strike artillery-rocket systems, unmanned reconnaissance, and loitering aerial combat systems, as well as ISTAR capabilities. This significant deal underscores the company's strong position in the global defense market and its ability to secure large-scale contracts.
Furthermore, Elbit Systems' board of directors declared a dividend increase to $0.75 per share, up from the previous $0.60, payable on October 27 to shareholders of record as of October 14. This 25% boost in dividend payout signals management's confidence in the company's financial health and future prospects.
The company also noted that ongoing conflicts in the Middle East have led to increased demand for its products from the Israeli Ministry of Defense, potentially generating additional material orders in the future. As of June 30, 2025, Elbit Systems reported a robust order backlog of $23.8 billion, with approximately 68% attributable to orders outside of Israel.
The combination of strong quarterly performance, a major new contract, increased shareholder returns, and potential for future growth has clearly resonated with investors, driving the stock's significant pre-market rally. As global defense spending continues to rise, Elbit Systems appears well-positioned to capitalize on growing demand for its advanced military technologies and solutions.