26 October 2020

Covid-19: Elbit Systems announces anticipated earnings impact

by Charles Forrester

Israel’s Elbit Systems announced on 26 October that the company was expecting to record an impact on its third-quarter earnings due to the Covid-19 pandemic reducing the demand for products.

In a release, the company said that non-cash expenses related to impairment of assets and inventory write-offs of approximately USD60 million are expected to be recorded as a “cost of revenues” line item. The company’s operations in the commercial aviation sector have been hampered as demand has been reduced.

Covid-19 has caused a reduction in demand for Elbit Systems’ commercial aviation offerings, which include the Skylens wearable heads-up display. (Elbit Systems Ltd)

“The significant slowdown in commercial air traffic and the expectation that a commercial air traffic recovery to 2019 levels will likely take a number of years have reduced the demand for products and services for the commercial aviation markets,” the company said. “Additionally, manufacturers of aircraft for these markets have announced plans to reduce production rates to adapt to the lower demand.”

Elbit Systems’ presence in the commercial aviation sector includes Enhanced Flight Vision Systems (EFVS) for commercial aircraft and helicopters, Integrated Modular Avionics (IMA), power and control systems, and enhanced awareness applications for pilots. Products include the ClearVision, Skylens, EVS II and EVS-SP multispectral enhanced vision systems (EVS), and its Landing system. The company’s Arizona-based subsidiary, Universal Avionics, manufactures avionics systems for business jets, turboprop aircraft, transport aircraft, helicopters, and regional and commercial airliners, both as retrofits and “forward fits”.

Israel’s Elbit Systems announced on 26 October that the company was expecting to record an impact on...

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