By Will Feuer
Ally Financial Inc. reported lower earnings in the second quarter due to a higher provision for credit losses, an increase in expenses and lower revenue.
The financial-services company posted net income of $454 million, down from $900 million a year earlier. Earnings were $1.40 a share, compared with $2.41 a share.
Stripping out one-time items, adjusted earnings were $1.76 a share. Analysts surveyed by FactSet were looking for adjusted earnings of $1.87 a share.
Ally provisioned $304 million for credit losses in the quarter, an increase of $336 million from a year ago. The company said the increase reflected reserve build for expected credit losses tied to retail auto originations in the recently ended quarter.
Revenue was $2.08 billion, down slightly from $2.09 billion in the year-ago period. Analysts had been expecting revenue of $2.20 billion.
Other revenue fell $226 million from a year earlier to $312 million, largely due to a $136 million decrease in the fair value of equity securities, the company said.
Noninterest expenses increased $63 million from a year ago due to the addition of credit-card operations and continued investments in business growth, talent and technology.
Write to Will Feuer at [email protected]
Credit: www.marketwatch.com /