Demo
ALLY NYSE· Ally Financial Inc.
FundamentalsNews digest Peer analysis
Login
ALLY NYSE· Ally Financial Inc.
Earnings report Q4 2023

Ally Financial Inc. Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

In the latest quarter, Ally Financial Inc. reported a significant increase in revenue. The company's total financing revenue and other interest income reached $13.96 billion, compared to $10.62 billion in the previous year and $8.65 billion in the year before that. This represents a favorable change of 31% compared to the previous year and a 23% change compared to two years ago.

Strengths

The increase in revenue can be attributed to several factors. Firstly, higher yields from higher benchmark interest rates contributed to the growth, as the company's commercial automotive loans are generally variable-rate. Additionally, improvements in new vehicle supply led to higher asset balances, further boosting revenue. The impacts of a higher interest rate environment on the investment securities portfolio and hedging activities, as well as higher interest associated with cash and cash equivalents and growth within unsecured lending, also played a role in the revenue increase. Management comments indicate that these factors have positively impacted the company's financial performance.

Challenges

Despite the strong revenue growth, Ally Financial Inc. faced higher interest expense in the latest quarter. This was a response to higher benchmark interest rates, which increased the company's cost of funds associated with its deposit liabilities. The higher interest expense partially offset the revenue increase and presents a challenge for the company.

Noteworthy

It is worth noting that Ally Financial Inc. experienced a favorable change in net depreciation expense on operating lease assets. This expense decreased by $6 million compared to the previous year, indicating improved efficiency in managing lease assets.

Summary

Ally Financial Inc. delivered a strong performance in the latest quarter, with a significant increase in revenue. The company benefited from higher yields, improved asset balances, and the impact of a higher interest rate environment. However, higher interest expense posed a challenge for the company. Overall, Ally Financial Inc. demonstrated its ability to generate substantial revenue growth, showcasing its strength in the market.

Source documents

Form 10-K  filed on Feb 20, 2024
131 pages scanned

Reference data

Company financials Q4 revenue 1.68B
Analyst estimates Q4 EPS missed by -100.00%
Sign up to Fey

Get in-depth analysis on thousands of stocks for just $30/month. Cancel anytime.