Elbit Systems reported its consolidated results for the third quarter ended September 30, 2015. Revenues were $764.8 million.
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This compares to $722.7 million in Q3 2014, a growth of 5.8% mainly due to growth in revenues of land systems to Asia-Pacific. This growth was partially offset by a decrease in our C4ISR systems sold to Latin America customers.
Non-GAAP gross profit amounted to $233.5 million (30.5% of revenues) in the third quarter of 2015, as compared to $208.4 million (28.8% of revenues) in the third quarter of 2014. GAAP gross profit in the third quarter of 2015 was $223.3 million (29.2% of revenues), as compared to $203 million (28.1% of revenues) in the third quarter of 2014
The increase in the gross profit rate was mainly due to the mix of programs sold in the quarter and operational improvements.
Research and development expenses, net were $61.0 million (8.0% of revenues) in the third quarter of 2015, as compared to $55.8 million (7.7% of revenues) in the third quarter of 2014.
Marketing and selling expenses, net were $60.6 million (7.9% of revenues) in the third quarter of 2015, as compared to $51.8 million (7.2% of revenues) in the third quarter of 2014.
General and administrative expenses, net were $36.4 million (4.8% of revenues) in the third quarter of 2015, as compared to $35.3 million (4.9% of revenues) in the third quarter of 2014.
Non-GAAP operating income was $80.3 million (10.5% of revenues) in the third quarter of 2015, as compared to $70.8 million (9.8% of revenues) in the third quarter of 2014. GAAP operating income in the third quarter of 2015 was $65.3 million (8.5% of revenues), as compared to $60.1 million (8.3% of revenues) in the third quarter of 2014.
Financial expenses, net were $6.1 million in the third quarter of 2015, as compared to $23.4 million in the third quarter of 2014.
The relatively high finance expenses in the third quarter of 2014 resulted primarily from the accelerated depreciation of the New Israeli Shekel related to the company's U.S. Dollar derivative activities as well as the impact of exchange rate differences on balance sheet items.
Taxes on income were $10.3 million (effective tax rate of 17.3%) in the third quarter of 2015, as compared to $0.1 million in the third quarter of 2014.
The lower tax rate in the third quarter of 2014 was mainly as a result of settlement of tax audits, including adjustments for prior years, in some of the company's subsidiaries in Israel and 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 $1.7 million in the third quarter of 2015, as compared to of $1.0 million in the third quarter of 2014.
Net income attributable to non-controlling interests was $1.0 million in the third quarter of 2015, as compared to $2.9 million in the third quarter of 2014.
Non-GAAP net income attributable to the company's shareholders in the third quarter of 2015 was $62.3 million (8.1% of revenues), as compared to $43.9 million (6.1% of revenues) in the third quarter of 2014.
GAAP net income attributable to the company's shareholders in the third quarter of 2015 was $49.7 million (6.5% of revenues), as compared to $35.0 million (4.8% of revenues) in the third quarter of 2014.
Non-GAAP diluted net earnings per share (EPS) attributable to the company's shareholders were $1.46 for the third quarter of 2015, as compared with $1.03 for the third quarter of 2014.
GAAP diluted EPS attributable to the company's shareholders in the third quarter of 2015 were $1.16, as compared to $0.82 for the third quarter of 2014.
The company's backlog of orders as of September 30, 2015, totaled $6.4 billion as compared to $6.2 billion as of September 30, 2014.
Approximately 68% of the current backlog is attributable to orders from outside Israel. Approximately 48% of the current backlog is scheduled to be performed during the last quarter of 2015 and during 2016.
Cash flow from operating activities for the nine months ended September 30, 2015, was $255.7 million, as compared to $0.2 million used for operating activities in the nine months ended September 30, 2014. ■