UPDATE 1-Israeli defence firm Elbit Systems sees boost from IMI

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TEL AVIV, May 28 (Reuters) - Israeli defence electronics firm Elbit Systems reported a rise in first-quarter net profit on Tuesday and forecast further improvements in 2019 following its acquisition of IMI Systems.

The maker of drones, pilot helmet displays and cyber security systems said it earned $1.54 per diluted share excluding one-time items in the January-March period, up from $1.29 a year earlier. Revenue rose to $1.02 billion from $818.5 million.

Elbit bought rival IMI Systems, a manufacturer of military systems best known for being an early maker of the Uzi submachine gun, from the government for $500 million in November.

It has been merged into Elbit’s land division, making it among the top five companies for land-based systems.

Elbit’s shares were up 1.8 percent at midday in Tel Aviv, pushing gains so far in 2019 to 21 percent.

“A quarter ago I committed that IMI would be profitable in 2019. It’s already profitable,” Chief Executive Bezhalel Machlis told Reuters.

He said that the full impact of IMI’s integration had yet to be reflected, adding: “We will see improvement in the coming quarters.”

Chief Financial Officer Joseph Gaspar said IMI is expected to provide more than $500 million of revenues this year, although profit generated would depend on the pace of cost cutting and the number of contracts.

IMI has already won a number of contracts since being folded into Elbit, including one with the United States Armed Forces, one in Israel and another in Asia, with more on the way, said Gaspar.

Elbit, which has also seen growth in its network and communications business, has said it expects sales this year to exceed $4 billion, versus $3.7 billion in 2018.

The company noted that 27 percent of sales stemmed from its U.S. units but the company was growing in Europe and Asia-Pacific as well.

“We see increased defence spending over almost all the world,” Machlis said.

Elbit’s order backlog climbed to $9.66 billion at the end of March from $8.05 billion a year earlier.

The company declared a dividend of 44 cents per share for the first quarter, the same as the fourth quarter. (Additional reporting by Tova Cohen; Editing by Kirsten Donovan)