Ally Financial Swings To Profit, Tops Estimate - Update

(RTTNews) - Ally Financial Inc (ALLY) on Wednesday reported a swing to profit in the third quarter, helped mainly by growth in its auto financing business, with both earnings and revenue surpassing Wall Street estimates.

"Ally's results demonstrated continued strength and marketplace leadership by its Dealer Financial Services operation, as well as steady and efficient deposit growth at Ally Bank," said Michael Carpenter, the company's chief executive officer.

Ally, based in Detroit, Michigan, posted quarterly net earnings to common stockholders of $356 million or $0.74 per share, compared with a loss of $109 million or $0.27 per share last year.

Excluding items, adjusted earnings for the quarter were $0.53 per share, compared with earnings of $0.05 per share a year ago.

On average, 14 analysts polled by Thomson Reuters expected earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter included $130 million income from discontinued operations, compared with a loss of $86 million last year.

Net revenues for the third quarter rose to $1.26 billion from $1.11 billion in the prior year.

Analysts expected revenues of $981.8 million for the quarter.

Provision for loan losses declined to $102 million, compared with $141 million a year ago.

Ally's results were driven by strong performance from the auto finance franchise. Automotive financing revenue increased 6 percent year-over-year, and automotive earning assets grew 7 percent.

Consumer financing originations increased to $11.8 billion, with growth channel originations increasing 54 percent compared to the prior year period.

Year-over-year, excluding original issuance discount, the company's net financing revenue increased 17 percent.

A former financing unit of General Motors, Ally had to rely on $17 billion federal aid in 2009. Currently, the U.S. Treasury's stake in the company is about 11.4 percent.

ALLY is trading at $22.51, up $0.30 or 1.35%, on a volume of 2.2 million shares on the NYSE.