Ally Financial Q3 Earnings Beat on Higher Revenues but Stock Dips 2.3%

Core Viewpoint - Ally Financial reported third-quarter 2024 adjusted earnings of 95 cents per share, exceeding the Zacks Consensus Estimate of 81 cents, reflecting a 14.5% increase from the previous year [1] Financial Performance - Total GAAP net revenues reached $2.1 billion, a 6.9$2.12 billion [3] - Net financing revenues decreased by 2.9% year-over-year to $1.49 billion, primarily due to higher funding costs and lower average earning assets [3] - Total other revenues surged by 41.4$615 million, surpassing the projected $517.8 million [3] - Total non-interest expenses decreased marginally to$1.23 billion, reflecting effective expense management, compared to the estimate of $1.29 billion [3][4] Credit Quality and Loan Performance - Non-performing loans stood at$1.27 billion, down 15.6% year-over-year, better than the estimate of $1.32 billion [5] - Net charge-offs increased by 13.4$517 million, aligning closely with the projected figure [5] - The provision for loan losses rose by 27% year-over-year to $645 million, exceeding the estimate of$589.2 million [5] Capital Ratios - As of September 30, 2024, the total capital ratio improved to 12.9%, up from 12.5% in the prior year, while the tier 1 capital ratio increased to 11.2% from 10.7% [7] Share Repurchase Activity - The company did not engage in any share repurchases during the reported quarter [8] Market Outlook - The company faces challenges due to deteriorating credit quality and rising operating expenses, but efforts to diversify revenue streams may support profitability [9]