Ally, one of the largest U.S. auto lenders, inched past expectations with adjusted diluted EPS of $1.34 and a net interest margin of 3.62%, both narrowly above consensus. CEO Michael Rhodes said the results "provide another clear signal that our focused strategy is delivering results."
Auto originations reached $12.9 billion for the quarter, a 10% year over year increase from $11.7 billion and ahead of the $12.52 billion analysts projected. The pickup came even as U.S. consumer prices climbed in September, accelerating to the quickest rate in five months, propelled by higher fuel costs and maintaining pressure on household budgets. The company raised its full-year average earnings assets outlook again to 5% to 6%, after lifting it in July to 3% to 5%.
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Ally had guided to full-year consolidated net charge-offs of 1.2% to 1.3%, and now says that metric is "tracking toward low-end." At 7:22 a.m. New York time, shares were approximately unchanged at $37.60, and they were down 17% for the year through Monday. For your portfolio, that mix - firming loan growth, a slightly better margin, and cautious credit trending favorable - frames what the market is currently pricing into the stock.
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