Ally Financial Stock Soars Pre-Market As Q4 Net Income More Than Doubles: Retail’s Exuberant

Shares of Ally Financial Inc (ALLY) soared over 9% in Wednesday’s pre-market session after the company’s fourth-quarter earnings topped Wall Street estimates and net income more than doubled.

Adjusted revenue stood at $2.1 billion beating an analyst estimate of $2.02 billion. Earnings per share (EPS) came in at $0.78 versus an estimated $0.57.

Net income attributable to common shareholders jumped 131% YoY to $81 million during the quarter.

Ally Financial’s net interest margin (NIM) stood at 3.30%, up 11 basis points (bps) year-over-year. Provision for credit losses of $557 million decreased $30 million YoY primarily driven by lower Corporate Finance reserve build and the sale of Ally Lending.

The auto-finance segment witnessed a $69 million drop in pre-tax income to $397 million, primarily driven by higher non-interest expense and lower net financing revenue. At the same time, the insurance segment saw a pre-tax income of $36 million in the fourth quarter, down $91 million year over year.

Meanwhile, Corporate Finance recorded a pre-tax income of $120 million in the quarter, up $28 million year over year, primarily driven by lower provision expense and higher other revenue.

CEO Michael Rhodes expressed optimism about the strong momentum across the company’s business going into 2025.

“This optimism is driven by an improved outlook on credit, a balance sheet well positioned for margin expansion, and continued disciplined management of expenses and capital. During the fourth quarter, we took significant steps to enhance returns and strengthen our competitive position in our core businesses,” he said.

On Stocktwits, retail sentiment climbed into the ‘extremely bullish’ territory (86/100) from ‘bullish’ a day ago, accompanied by significant retail chatter.

Meanwhile, Ally Financial and CardWorks, Inc. have entered into a definitive agreement for CardWorks, and its wholly-owned bank subsidiary, Merrick Bank, to acquire Ally's credit card business.

This includes a portfolio of $2.3 billion in credit card receivables, with 1.3 million active cardholders as of Dec. 31, 2024.

"Ally's decision to sell its credit card business is part of our broader strategy to pursue a more focused approach, enabling us to simplify and streamline our structure, prioritize our core businesses, and drive improved returns," CEO Rhodes said.

Ally shares have gained over 6% year-to-date and over 5% in the past year.

Also See: United Airlines Stock Soars Pre-Market After Upbeat Q4 Earnings, Projections: Retail Sentiment Hits Year-High

For updates and corrections, email newsroom[at]stocktwits[dot]com.