What’s Driving ELST Stock? Elbit Systems Says Conflict Pressures Hurt Operations – But Demand Is Exploding

• The company noted that some of its operations were disrupted by war and other conflicts in the Middle East, resulting in supply chain and operational constraints.
• Elbit Systems announced a $1.4 billion contract it won from a European customer that is slated to last for a five-year period.
• The company reported a record backlog of $30.2 billion at the end of the first quarter. 

The U.S.-listed shares of Elbit Systems (ESLT) rose over 9% premarket on Tuesday after the defense contractor reported first-quarter earnings that beat Wall Street expectations, announced a major contract to modernize military programs for a European customer, and said that ongoing Middle East conflicts continue to drive a “material” increase in demand from Israel’s Ministry of Defense.

The company reported quarterly revenue of $2.19 billion, exceeding analysts’ estimates of $2.10 billion, while adjusted earnings of $3.87 per share surpassed the consensus of $3.35, according to Fiscal.AI.

"We began 2026 with a strong quarter across all key metrics, including double–digit growth in revenue and profitability, with Non–GAAP operating margins surpassing the 10% mark,” said Bezhalel (Butzi) Machlis, President and Chief Executive Officer at Elbit Systems.

Record Backlog Signals Strong Demand

The company reported a record backlog of $30.2 billion at the end of the first quarter. Machlis said that free cash flow during the quarter was very strong, and the company achieved a record backlog, surpassing a mark of $30 billion for the first time.

Elbit Systems stated that to meet the growing demand for its products and solutions, it has been scaling production capacity, increasing the use of automation, robotics, and AI, while maintaining strict capital discipline and expanding operational margins.

Middle East Conflict Impact On ESLT

Elbit Systems said the ongoing conflict in the Middle East has led to a “continued material increase” in the demand for its products and solutions from the Israel Ministry of Defense compared to the demand levels prior to the war.

However, the company warned that despite the demand for its products and solutions, the conflict has disrupted parts of its operations through supply chain bottlenecks, Red Sea shipping attacks by Houthi forces, material shortages, employee reserve call-ups, and limitations imposed by some countries on engagement with Israel.

ESLT Lands A $1.4B European Defense Contract

Elbit Systems announced a $1.4 billion contract it won from a European customer that is slated to last for a five-year period.  

The deal covers uncrewed autonomous solutions, advanced networked land electronic warfare, precision-guided artillery and air-to-ground munitions, and electro-optical reconnaissance systems, all networked via software-defined radios.

What Retail Thinks Of ESLT

On Stocktwits, retail sentiment surrounding the stock has improved to ‘extremely bullish’ from ‘bullish’ while message volumes stayed ‘normal’ over the past 24 hours.

Shares of  Elbit Systems have gained over 29% so far this year.

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