Ally Financial Q3 Earnings Report Coming Friday: Details

Ally Financial Inc ALLY will announce its third-quarter earnings this Friday. Investors are eager to learn about the company’s credit issues.

In September, CFO Russell Hutchinson mentioned at a New York conference that borrowers are facing increasing difficulties, especially in auto lending.

Delinquencies and loan losses have surpassed expectations, so the upcoming earnings report will be crucial for understanding how these challenges affected the company’s performance this quarter.

Key Points: In Q2, Ally reported $2.08 billion in revenue, down 1.6% from last year, due to inflation and rising interest rates. Net income plummeted 58% to $327 million, primarily due to higher loan losses and credit loss provisions rising to $490 million.

Ally’s auto lending, which is a major part of its business, is under pressure as borrowers struggle with costs. Auto originations fell to $10.7 billion from $13.3 billion a year ago.

Although demand for auto loans remains strong, rising delinquencies indicate more borrowers are struggling. Delinquency rates in the auto sector increased from 3.53% to 3.81% in Q2.

What’s Next: Conditions have worsened leading into Q3. Hutchinson noted that delinquencies in retail auto lending rose significantly in July and August. Additionally, net charge-offs increased, driven by high inflation and a weak job market.

Ally’s stock has seen volatility due to these credit issues and general economic uncertainty, particularly regarding the recent jobs report and Federal Reserve policies. While earnings guidance remains unchanged, Hutchinson stressed a focus on capital and expense management.

Analysts will be watching closely for any further declines in credit metrics in the upcoming report, as well as any changes in the company’s future guidance.

How to Buy ALLY Stock: To buy shares of Ally Financial, you’ll need a brokerage account. You can purchase whole shares or fractional shares, depending on your investment. For example, with Ally’s share price at $35.93, $100 would buy you 2.78 shares.

Shorting the stock is more complex; it requires access to options trading or working with a broker who can lend shares for you to sell. You can also use options like buying puts or selling calls to profit from a share price drop.

Ally’s 52-week high is $45.46 and the low is $22.54, according to Benzinga Pro.