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Ally Financial Stock Jumps More Than 10% After Strong Q4 Results, Deal with Synchrony
ALLYAlly(ALLY) Investopedia·2024-01-19 21:00

Financial Performance - Ally Financial reported strong fourth quarter results with earnings per share (EPS) of 0.45andtotalnetrevenueof0.45 and total net revenue of 2.1 billion, both exceeding analysts' estimates [1] - Net financing revenue in the auto finance business rose by 5millionto5 million to 1.3 billion, driven by higher interest rates [2] - Pre-tax income at the insurance unit increased by 28millionto28 million to 129 million, primarily due to elevated earned premiums [2] Strategic Transaction - Ally Financial announced a deal with Synchrony Financial to sell its point-of-sale financing arm, which includes 2.2billioninloanreceivables[1][2]−Theportfolioincludesrelationshipswithnearly2,500merchantlocationsandsupportsmorethan450,000activeborrowersinhomeimprovementservicesandhealthcare[2]−Thetransactionisexpectedtocloseinthecurrentquarter,withfinancialconsiderationsforthepurchasenotdisclosed[2]MarketReaction−AllyFinancialsharessurged10.42.2 billion in loan receivables [1][2] - The portfolio includes relationships with nearly 2,500 merchant locations and supports more than 450,000 active borrowers in home improvement services and healthcare [2] - The transaction is expected to close in the current quarter, with financial considerations for the purchase not disclosed [2] Market Reaction - Ally Financial shares surged 10.4% to 35.46, reaching their highest level since August 2022 [3] - Synchrony Financial stock also rose by 3.1% to $36.89 [3]