Net income – SAR9.1 million, +9% Y-o-Y, -26% Q-o-Q, -57% versus EFGe Revenue – SAR1,274 million, +17% Y-o-Y, +77% Q-o-Q, +1% versus EFGe Operating profit – SAR12.6 million, +45% Y-o-Y, +7% Q-o-Q, -43% versus EFGe   United Electronics Company (eXtra) posted its KPIs for 4Q2015, with earnings coming at SAR9.1 million, growing 9% Y-o-Y from a very low base as 4Q2014 was affected by the closure of eight stores for seven days (during the mega sale) that resulted in foregone sales of cSAR150 million. Also, earnings contracted 26% sequentially, despite the mega sale falling entirely in 4Q2015, owing to a combination of sales mix and a surge in SG&A expenses to boost the appetite for the event. Earnings came in well below our forecast (-57%) on weaker-than-expected margins – we had expected the earnings run rate delivered during 9M2015 to sustain for the final quarter of the year. Revenue grew 17% Y-o-Y to SAR1,274 million (+77% Q-o-Q) coming in broadly in line with our forecast (+1%). During the quarter, the company launched two new locations, closing the year with 41 stores (versus 38 in 2014). Gross profit increased 7% Y-o-Y to SAR176 million (-9% versus forecast), with gross margin narrowing c120bps Y-o-Y to 13.8%, despite an already low comparable last year, partly on sales mix (greater sales of low-margin electronics). Meanwhile, operating profit grew 45% Y-o-Y as SG&A costs only inched up 5%; accordingly, EBIT margin widened c20bps to 1.0%. EBIT was 43% below our estimate due to the weaker gross margin. EBIT growth was offset, however, by below-the-line items, including higher net finance and zakat charges.   Our initial reading of the results set is negative, as we had expected the company to begin showing signs of a turnaround post the 4Q2014 weakness. Adjusting for the foregone sales last year (as a result of the store closures), revenue grew only 3% Y-o-Y, which indicates the extent of the electronics market weakness and that there is a long way for consumer confidence to recover for the company. We maintain our Neutral rating on eXtra. (Earnings release, Nada Amin, Hatem Alaa)