Elbit Systems Reports Third Quarter 1998 Results - Net Income Up 33%, Backlog Reaches $691 Million -.

HAIFA, Israel--(BUSINESS WIRE)--November 3, 1998--Elbit Systems Ltd. (NASDAQ/NM symbol: ESLTF) today announced unaudited results for the third quarter ended September 30, 1998.

Revenues for the quarter were $101.3 million, an increase of 11% versus $91.1 million in the third quarter of 1997. Net income for the quarter ended September 30, 1998 was $7.1 million, or $0.26 per share, compared with $5.4 million, or $0.23 per share, for the same period in 1997. Gross profit for the third quarter was $28 million, an increase of approximately 12% compared with $25.1 million in the corresponding period of 1997.

Revenues for the nine month period ended September 30, 1998 were $304.6 million, an increase of 13% compared with $270.1 million for the same period last year. Net income for the nine months ended September 30, 1998 was $20 million, or $0.75 per share, compared with $15.2 million, or $0.65 per share, for the corresponding period of 1997. Gross profit for the first nine months of 1998 was $84.4 million, an increase of approximately 16% compared with $72.9 million in the corresponding period of 1997.

The Company's backlog of orders as of September 30, 1998 was $691 million versus $670 million at the end of 1997. Approximately 75% of the backlog are orders from outside Israel.

Commenting on the results, Mr. Joseph Ackerman, President and Chief Executive Officer said, "Our performance this quarter marks the seventh consecutive quarter of growth in revenue, gross profit and net income over the corresponding periods. Our solid performance, in addition to our backlog, reflects the continuous investment in research and development, process improvement and personnel. We are preparing to meet the challenges and opportunities ahead by establishing cooperation agreements with strategic partners and by continuing our technological and business development."

The Board of Directors declared a dividend for the third quarter of 1998 of $0.05 per share. The record date for the dividend will be December 29, 1998, and will be paid on January 11, 1999 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)

                           Nine Months Ended     Three Months Ended
                        09/30/98    09/30/97    09/30/98   09/30/97
                      (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Revenues                $304,626    $270,090    $101,285    $91,122
Cost of revenues         220,243     197,148      73,255     66,043
                         -------     -------      ------     ------
Gross Profit              84,383      72,942      28,030     25,079
                          ------      ------      ------     ------

Research & development
 costs, net               23,500      20,634       6,512      6,062
Marketing and selling
 expenses                 23,115      20,846       7,701      7,755
General and
 administrative expenses   9,614       9,527       3,436      3,480
                           -----       -----    --------   --------
                          56,229      51,007     17,649      17,297
                          ------      ------      ------     ------

Operating income          28,154      21,935      10,381      7,782

Financing income
 (expenses), net             274        (275)        (76)      (375)
Other income (expenses),
 net                         144         100          31        (22)
                             ---         ---          --       ----

Income before income
 taxes                    28,572      21,760      10,336      7,385

Provision for income
 taxes                     7,800       6,180       2,830      2,030
                           -----      -----        -----      -----
                          20,772      15,580       7,506      5,355

Company's share of
 partnership loss           (794)       (420)       (386)        --
                           -----      -----        -----         --
Net income               $19,978     $15,160      $7,120     $5,355
                         =======      ======     =======     ======

Earnings per share

Basic net income per
 share                     $0.81       $0.71       $0.29      $0.25
                           =====       =====       =====      =====

Weighted average number
 of shares used in
 computation
 (In thousands):          24,639      21,386      24,671     21,386
                          ======      ======      ======     ======

Diluted net income per
 share                     $0.75       $0.65       $0.26      $0.23
                           =====     =======     =======    =======

Weighted average number
 of shares used in
 computation
 (In thousands):          26,999      23,400      27,060     23,491
                          ======      ======      ======     ======



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

                                          09/30/98     12/31/97

                               (Unaudited) (Audited)
Assets
  Current assets:
  Cash and short term deposits             $54,045      $58,190
  Trade receivables and others              63,916       70,969
  Inventories, net of advances              68,439       87,001
                                            ------       ------

Total current assets                       186,400      216,160


Long-term receivables                       90,798       43,282
Deposits, loans and others                  27,440       30,490
Fixed assets, net                           37,027       29,797
Other assets, net                              796          958
                                               ---          ---
                                           342,461      320,687

Liabilities and Shareholders' Equity

Current liabilities                        153,371      154,692
Long-term liabilities                       37,042       30,675
Shareholders' equity                       152,048      135,320
                                           -------      --------
                                          $342,461    $ 320,687