Kollsman Fine to Cost Elbit Systems Most of Q2 Profit

Last month a court in Memphis, Tennessee ruled against Kollsman in a suit filed by Innovative Solutions and Support.

Nathan Sheva
Nathan Sheva

Defense electronics developer Elbit Systems has made a second-quarter profit thanks to increased revenues from contracts with short delivery dates - but it won't get to keep the money.

Most of the earnings will have to be set aside for damages imposed by an American court following a conviction for the improper use of commercial secrets by subsidiary Kollsman.

Elbit Systems says it hopes it profits will be up by between $8 million and $11 million over the $700,000 loss recorded for the second quarter last year, but the net impact from the $23.2 million court ruling is $10 million.

Last month a court in Memphis, Tennessee ruled against Kollsman in a suit filed by Innovative Solutions and Support, concerning two models of computers installed in planes used in civil aviation.

The ruling includes direct damages and exemplary damages because the court determined that Kollsman's actions were deliberate. Kollsman plans to appeal the decision.

Elbit Systems will be publishing its financial statement for the second quarter of 2008 on August 12.

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