Ally Financial Q3 Earnings Report: What’s Happening

Ally Financial Inc ALLY is reporting its Q3 earnings on Friday before the market opens, and investors are anxious about ongoing credit issues.

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

With higher delinquencies and unexpected net charge-offs, the upcoming earnings report will be crucial for understanding the impact on Ally’s finances.

Key Points: In Q2, Ally had mixed results: revenue was $2.08 billion, down 1.6% year-over-year, and net income dropped 58% to $327 million due to higher loan losses. The net interest margin also fell from 4.03% to 3.39% due to increased costs.

Ally’s auto lending, a major part of its business, saw originations decrease from $13.3 billion to $10.7 billion year-over-year, indicating borrower struggles amid inflation.

The delinquency rate in auto lending rose to 3.81%, up from 3.53% in the previous quarter.

Future Outlook: Trends have worsened heading into Q3, with delinquencies increasing by 20 basis points in July and August, according to Hutchinson. Rising inflation and a weak job market are significant factors behind this risk.

Recently, Ally’s stock has been volatile due to these credit concerns and broader economic conditions. Despite not changing its earnings guidance, Hutchinson stated that the company will focus on managing capital and expenses during these tough times.

Analysts are eager to see if Q3 results show further credit deterioration, especially given recent delinquency rates. Any changes in future guidance could indicate the company’s risk management plans.

How To Buy ALLY Stock

If you’re interested in investing in Ally Financial, you can buy shares through a brokerage account. Some platforms let you buy ‘fractional shares,’ so you don’t have to purchase a whole share. For example, with Ally trading at $35.93, $100 would get you about 2.78 shares.

If you want to short the stock, you’ll need access to an options trading platform. You can short by borrowing shares or through options like buy puts or sell calls, which profit from a falling stock price.

According to Benzinga Pro, ALLY’s 52-week range is a high of $45.46 and a low of $22.54.