Revenue – SAR33.31bn, -11% Y-o-Y, -3% Q-o-Q, -3% vs. EFGe Gross Profit – SAR10.96bn, -7.35% Y-o-Y, -0.54% Q-o-Q, +2% vs. EFGe Operating Income – SAR7.64bn, -11% Y-o-Y, +10% Q-o-Q, +4% vs. EFGe Net Income – SAR5.22bn, -7% Y-o-Y, +10% Q-o-Q, +8% vs. EFGe   Saudi Basic Industries Corporation (SABIC) has just announced its 3Q16 results, with bottom-line earnings improving 10% Q-o-Q to SAR5.22bn, 8% ahead of our forecasts. According to the release, the improved bottom-line earnings Q-o-Q were mainly a function of higher other income, as well as base effect, since 2Q16 earnings included a one-off SAR366mn impairment related to Ibn Rushd. After adjusting for the one-off impairment from last quarter, operating earnings would have been flattish Q-o-Q and only slightly ahead of our forecasts. Full financials are not yet available, but we believe an improved petrochemical performance on higher PE and PP spreads could have offset the weakness in fertiliser (urea –7% Q-o-Q, ammonia -22%) and steel markets. The slight beat at the operational level was driven by higher-than-expected gross margins, which came in at 32.9% (vs. 32.0% in 2Q16), better than our 31.4% expectation, though it is not yet clear what drove the higher margins. In addition, slightly lower-than-expected S,G&A and higher-than-expected other income also contributed to the beat.   Overall, a solid set of numbers with no major surprises. We remain Neutral on SABIC as we think current valuation levels are full (2017 P/E of c15x). (Earnings release, Yousef Husseini)   SABIC: SAR82.35 as of 18 October 2016, Rating: Neutral, FV: SAR90.00 per share, MCap: USD65,880mn, SABIC AB / 2010.SE