Hopes ran high heading into Elbit Systems' (NASDAQ:ESLT) Q4 earnings report Wednesday. Sadly, when the news came out, those hopes were dashed -- leaving Elbit shares trading 3% lower by the week's end. Here's why:

Elbit reported profits of $1.01 per share in Q4, missing analyst estimates by $0.15 and down 26% from Q4 2013. The company's revenue decline was less steep (down only 4% year over year) but still fell short of the mark at $811.5 million.

That's the bad news. The good news is that profits for the year were up 9% at $4.34 per share. (Pro forma profits were both greater -- $4.99 per share -- and flatter, rising a mere 2%). Revenues, too, were up (1% to $2.93 billion). And by all indications, revenues should continue increasing over time.

Bad news won't last long
How do we know this? Well, Elbit noted that backlog at the company increased to $5.82 billion over the course of the year. That number was only up 2.4%, but even so, grew faster than revenues. As backlogged work transitions into revenues over the next two years, revenues should continue to rise.

Indeed, they could rise faster than many investors expect. Consider: Backlog now includes enough work to keep Elbit busy for two straight years at current revenue levels. But Elbit believes that new opportunities in Latin America, India, and Australia could bring in as much as $10 billion in new orders over the next three years.

Indeed, just one day after the "bad" earnings news broke, Elbit confirmed that an unidentified "Asia-Pacific" customer has hired it to install night optics and other upgrades on its battle tanks -- a three-year contract that will bring $290 million in revenues for Elbit. And only last week, Elbit confirmed that it's all set to begin installing C-MUSIC on-airplane anti-missile defense systems for Israeli airline El Al.

At $3 million per unit installed, El Al alone promises to generate well over $100 million in new revenues for Elbit. Equipping all Israeli civilian airliners with C-MUSIC (which is the plan) would add about 10% to Elbit's annual revenues.

Foolish takeaway
Priced at nearly 14 times earnings, and paying a 2% dividend, Elbit is no great bargain if it grows at only the 11% annually that analysts expect over the next five years. But that's just the point: If Elbit wins all, or even a significant portion of the contracts it says it's targeting, the company will grow much faster than anyone seems to expect.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.