Riyadh - Mubasher: NCB Capital (NCBC) has set the target price (TP) of United Electronics Company (eXtra) at SAR 26.3, with a "Neutral" recommendation.

eXtra reported a better than expected set of results in the first quarter of 2017, with a net income of SAR 12.9 million versus a loss of SAR 45.9 million in Q1-16, the research firm said in a statement on Wednesday.

“This is significantly higher than the NCBC estimates of a loss of SAR 3.8 million.”

“We believe the strong results are due to significantly lower than expected operating expenses, supported by a strong revenue growth and gross margin expansion,” the report stated.

Sales increased 8.3% year-on-year to SAR 805 million, broadly in-line with NCBC estimates of SAR 757 million.

NCBC believes that the opening of one new store further supported revenue growth.

This growth reflects a lower than expected impact of allowance cuts on discretionary spending.