Ally Financial Reports Strong Earnings as Auto Loans Perform Well
The early days of the COVID-19 pandemic were rough on most financial companies, especially banks and real estate investment trusts. Banks were forced to take huge provisions for potential credit losses under the new Current Expected Credit Loss (CECL) methodology, which then ran into COVID-19 provisions.
Some of these companies are reporting declining year-over-year earnings. However, the sequential quarterly numbers tell a different story. Ally Financial (NYSE: ALLY) is a good example.
Ally just reported full-year earnings per share of $2.88, down 34% on a year-over-year basis. Adjusted earnings per share (which strips out many non-recurring items) came in at $3.03, which is down 19% year over year. That said, full-year total net revenue rose 5% to $6.7 billion. For the fourth quarter, the company reported earnings per share of $1.82. This was a significant increase from the third-quarter earnings of $1.26 per share or the $0.99 reported in the fourth quarter of 2019.
Source Fool.com
