ELBIT SYSTEMS REPORTS FIRST QUARTER 1997 RESULTS --Revenues Increase 55%, Net Income Up 38%--.

HAIFA, Israel--(BUSINESS WIRE)--May 7, 1997--Elbit Systems Ltd. (NASDAQ/NM symbol: ESLTF) today announced unaudited results for the first quarter, 1997.

Revenues for the quarter were $91.8 million, an increase of 55% versus $59.2 million in the first quarter of 1996. Gross profit was $24.4 million (26.6% of revenues), versus $14.7 million (24.9% of revenues) for the corresponding quarter of 1996. The increase in revenues and gross profit reflects the transition of certain large upgrade programs into production.

Operating income was $6.4 million, an increase of almost 70% over the same period last year. Net income was $4.7 million, or $0.21 per share, an increase of 38% over the $3.4 million, or $0.16 per share, recorded in the first quarter of 1996. It should be noted that this growth in net income was achieved concurrently with a significant increase in the Company's investment in R&D during the first quarter of 1997, which was $8.4 million, versus $4.3 million in the corresponding quarter of 1996.

The Company's backlog of orders as of March 31, 1997, was $620 million versus $614 million at the end of 1996. Approximately 76% of the backlog are orders from outside Israel.

Commenting on the results, Mr. Joseph Ackerman, President and Chief Executive Officer said: "The results of our operations in the first quarter reflect the implementation of the Company's strategic plan. We have recently been awarded a number of new contracts and we will continue our significant R&D and marketing efforts in order to maintain a leading position in our areas of activity."

The Board of Directors declared a dividend for the first quarter of 1997 of $0.05 per share. The record date for the dividend is June 30, 1997, and will be paid on July 14, 1997 net of taxes and levies to be withheld at the rate currently estimated to be 25%.

Forward looking statements in this release involve a number of risks and uncertainties including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed in the Company's SEC filings.

Elbit Systems Ltd. is engaged in a wide range of defense-related airborne, ground and command, control and communications ("C3") programs throughout the world. They focus on upgrading of existing military platforms and developing new technologies for defense applications. -0-

                            ELBIT SYSTEMS LTD.
                           STATEMENTS OF INCOME
           (In thousands of U.S. dollars, except per share amounts)


                                                Three Months Ended March 31
                                                   1997        1996
                                                (Unaudited)  (Unaudited)

Net Revenues                                        91,807     59,152
Cost of revenues                                    67,430     44,417

Gross profit                                        24,377     14,735

Operating expenses:
   Research and development, net                     8,355      4,324
   Selling and marketing                             6,493      4,402
   General and administrative                        3,168      2,257
Total operating expenses                            18,016     10,983

Operating income                                     6,361      3,752
Financial income, net                                  101        133
Other income, net                                       30        120
Income before income taxes                           6,492      4,005
Provision for income taxes                           1,388        594
                                                     5,104      3,411
Company's share of partnership income (loss)         (425)       (16)
Net income                                           4,679      3,395

Earnings per share                                   $0.21      $0.16

Weighted average number of shares                   22,546     21,386


                            ELBIT SYSTEMS LTD.
                       CONSOLIDATED BALANCE SHEETS
                      (In thousands of U.S. Dollars)

                                              March 31     December 31
                                                1997        1996
                                              (Unaudited)  (Audited)
Assets

Current Assets:
Cash and short term deposits                     27,229     23,374
Trade receivables and others                     72,638     66,721
Inventories, net of advances                     57,000     73,280
Total current assets                            156,867    163,375

Deposits and long-term loans                     40,370     40,531
Investments, long-term receivables, and others   21,583     11,044
Fixed assets, net                                25,514     25,508
Other assets, net                                   996        896
                                                245,330    241,354

Liabilities and Shareholders' Equity

Current Liabilities                             132,534    145,968
Long-term liabilities                            31,560     17,760
Shareholders' equity                             81,236     77,626

                                                245,330    241,354

CONTACT: Arie Tal, Secretary

Ilan Pacholder, Finance Director

Elbit Systems Ltd.

Tel: [phone]

Fax: [phone]

or

Jody Burfening

Lippert/Heilshorn & Associates, Inc.

212-838-3777 (ext. 106)

[e-mail]