Elbit Systems Reports First Quarter Results - Revenues Increase 12%; Net Income Up 29% -.

HAIFA, Israel--(BUSINESS WIRE)--May 5, 1998--Elbit Systems Ltd. (NASDAQ/NM symbol: ESLTF) today announced results for the first quarter ended March 31, 1998.

Revenues for the quarter ended March 31, 1998 were $103.1 million, an increase of 12% compared with $91.8 million for 1997. Gross profit for the quarter was $28.6 million compared with $24.4 million for the same period last year. Net income for the quarter was $6.1 million, or $0.23 per share (diluted), compared with $4.7 million, or $0.20 per share (diluted), for the first quarter 1997.

Per share results for the quarter were affected by an increase in the weighted average number of shares outstanding due to the Company's public offering of 3,223,750 ordinary shares completed in the fourth quarter of 1997.

The Company's backlog of orders as of March 31, 1998 was $655 million compared with $670 million as of December 31, 1997. Orders from outside Israel constituted approximately 79% of the backlog at the end of the quarter with 83% of the backlog scheduled to be performed in 1998 and 1999.

Commenting on the results, Mr. Joseph Ackerman, President and Chief Executive Officer said: "This is the fifth consecutive quarter of growth in revenue, gross profit and net income over the corresponding previous periods, while increasing investments in research and development as well as in marketing activities. It is our intention to continue to enhance our technological personnel and further expand our market presence in order to maintain our leading position and continue the growth of the Company."

The Board of Directors declared a dividend for the first quarter of 1998 of $0.05 per share. The record date for the dividend is July 6, 1998 and will be paid on July 20, 1998 net of taxes and levies to be withheld at the rate currently estimated to be 25%.

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

Forward looking statements with respect to the Company's business, financial condition and results of operations, in this release are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements, 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 from time to time in the Company's SEC filings.

-0-

                       ELBIT SYSTEMS LTD.
              Condensed Statements of Operations
      (U.S. Dollars in thousands, except per share data)

                                   Three Months Ended  Year Ended
                                   03/31/98   03/31/97   12/31/97
                                 (Unaudited) (Unaudited) (Audited)

Revenues                            $103,061   $91,807  $372,342
Cost of revenues                      74,436    67,430   271,795
Gross Profit                          28,625    24,377   100,547

Research & development costs, net      9,641     8,355    27,884
Marketing and selling expenses         7,808     6,493    28,264
General and administrative expenses    3,078     3,168    13,232

                                      20,527    18,016    69,380

Operating income                       8,098     6,361    31,167
Finance income (expenses), net            48       101     (316)
Other income (expenses), net              44        30       83

Income before income taxes             8,190     6,492    30,934
Provision for income taxes             2,081     1,388     8,316
                                       6,109     5,104    22,618

Company's share of partnership loss     (55)      (425)    (463)
Net income                            $6,054    $4,679   $22,155

Earnings per share
Basic net income per share             $0.25     $0.22     $1.00
Weighted average number of shares
 used in computation (in thousands)   24,613    21,386    22,187
Diluted net income per share           $0.23     $0.20     $0.92
Weighted average number of shares
used in computation (in thousands)    26,672    23,330    24,202

-0-

                      ELBIT SYSTEMS LTD.
                  Condensed Balance Sheet
                 (U.S. Dollars in thousands)

                                       03/31/98            12/31/97
Assets                                (Unaudited)          (Audited)
 Current Assets
 Cash and short term deposits           $56,880             $58,190
 Trade receivables and others            72,868              70,969
 Inventories, net of advances            79,091              87,001
Total Current Assets                    208,839             216,160

Deposits and long-term loans             64,702              49,075
Long term receivables and others         24,319              24,697
Fixed assets, net                        31,570              29,797
Other assets, net                           763                 958
                                       $330,193            $320,687

Liabilities and Shareholders'
Equity

Current liabilities                     155,466             154,692
Long-term liabilities                    34,544              30,675
Shareholders' equity                    140,183             135,320
                                       $330,193            $320,687

-0-

CONTACT: Arie Tal, Corporate Secretary

Ilan Pacholder, Finance Director

Elbit Systems

Tel: [phone]

Fax: [phone]

or

Jody Burfening

Lippert/Heilshorn & Associates Ltd.

Tel: [phone] (ext. 304)

[e-mail]