Ally Financial Profit Driven Higher by Boom in Auto Sales
February 02 2016 - 09:50AM
Dow Jones News
Ally Financial Inc. said profit in its fourth quarter soared as
the Detroit lender saw auto originations rise and retail deposits
grow.
One of the nation's biggest auto lenders, Ally's auto-finance
franchise has driven results in recent quarters. The company lost a
big chunk of its auto-lending business last year when General
Motors Co. largely squeezed it out of its lucrative
subsidized-leasing business, but Ally has worked to recoup much of
that lost business.
In the fourth quarter, consumer auto originations edged up to
$9.3 billion from $9 billion a year earlier. Gains in the Chrysler
channel, Ally said, continued to buoy originations and excluding
GM, originations jumped 35% from the year-ago period.
Meanwhile, retail deposits grew 16% from a year earlier to $55.4
billion as the lender, formerly known as GMAC and spun off from GM
in 2006, added more customers and saw increased demand for savings
products. For the year, Ally exceeded its own targets for both
retail deposit growth and auto originations, according to Chief
Executive Jeffrey Brown.
Looking ahead, Mr. Brown said Ally is on track to deliver 15%
growth in earnings per share this year, translating to about $2.30
in adjusted per-share profit. Analysts have predicted $2.37,
according to Thomson Reuters. Ally redeemed $1.3 billion in
remaining Series G preferred securities during the quarter, a move
the CEO said removes the restriction on offering common equity
distributions and positions Ally to meet its objective of
initiating a dividend and share repurchase program in 2016.
Overall, Ally reported a profit of $263 million, up from $177
million a year earlier. On a per-share basis, Ally reported a loss
of $1.97 a share because of the redemption of preferred securities.
Excluding that redemption, among other items, Ally earned 52 cents
a share, up from 40 cents a year earlier and a penny better than
analysts' average estimate.
Shares in the company, down 14% since the start of the year
through Monday's close, were inactive in premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 02, 2016 09:35 ET (14:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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