STC bested estimates by analysts as it reported profits of $965 million or 3.62 billion riyals, which was up from the same period one year ago of 393 million riyals. Analysts had forecasted profits for STC to be 2.51 billion riyals.
Although the jump in profit was largely due to STC’s change in its accounting method, Saudi retail investors tend to look only at the headline numbers.
One analysts said the main reasons for reporting higher net income are better cost efficiencies, which started during the 2013 third quarter. This was coupled with improvement in income from its associates.
STC also proposed a dividend for the fourth quarter of 0.75 riyals a share. That was higher than the previous quarter dividend of 0.5 riyals that helped to boost the company stock.
Shares of stock at STC were up 5.5% to the highest price since October of 2008. NBK Capital in Kuwait however cut its rating on the stock to a sell from a hold Tuesday.
Petrochemical stocks saw limited gains as firms in the industry posted earnings that were weaker than had been expected.
National Industrialization dropped by 2.2% after it reported a 24% increase in net profit for the fourth quarter, which was 300 million riyals.
However, that missed the NCBC projection of 448 million riyals and the market average of 413 million riyals.
SABIC, Saudi Basic Industries dropped by 2.2% to its low in January and extended the declines since it posted earnings that missed the forecast set by analysts.
As a whole, the index was up 0.08% on the day, the first gain for the week. The index was retreating after hitting a high of five years last Thursday.
The market in Dubai ended a winning streak of eight sessions as investors participated in profit taking while awaiting more earnings reports for the fourth quarter.
The market slipped by 0.1% after it had reached its five-year high.