OneMain Holdings Q4 Earnings Beat on Higher NII, Stock Falls 3.2%

OneMain Holdings’ OMF fourth-quarter 2024 adjusted earnings of $1.16 per share surpassed the Zacks Consensus Estimate of $1.12. However, the bottom line declined 16.5% from the year-ago quarter's level.See the Zacks Earnings Calendar to stay ahead of market-making news.In the reported quarter, the company witnessed an increase in net interest income (NII). Also, loan balances improved, which was a positive. However, a rise in provisions and total other expenses were undermining factors. Further, a decline in total other revenues was a negative. Shares of OMF lost 3.2% on Friday due to these concerns.After considering non-recurring items, net income available to common shareholders (on a GAAP basis) was $126 million, down from $165 million in the prior-year quarter.For 2024, adjusted earnings per share was $4.89, which outpaced the consensus estimate of $4.58 but declined 9.9% year over year. Net income available to common shareholders (GAAP basis) was $509 million, down 20.6%.OMF’s NII Rise, Expenses UpNII was up 10% from the prior-year quarter's level to $1.01 billion. The increase was primarily driven by higher average net finance receivables, partially offset by a rise in average debt to support receivables growth and higher average cost of funds. Total other revenues were $160 million, down 14% from the prior-year quarter's figure. The decline was due to a fall in almost all the components except other income. Total other expenses rose 10.3% to $482 million on account of higher operating expenses.Credit Quality Deteriorates for OneMain HoldingsThe provision for finance receivable losses was $523 million, up 17.3% from the prior-year quarter, mainly due to a $59 million increase in the allowance for finance receivables.In the reported quarter, OneMain Holdings recorded net charge-offs of $463 million, up 11.6% from the prior-year quarter. The company reported 30-89 days delinquencies of $743 million, up 7.8%.On the other hand, the allowance ratio of 11.48% was down from 11.62% in the prior-year quarter.OMF’s Net Finance Receivable Rise, Debt IncreaseAs of Dec. 31, 2024, total net finance receivables amounted to $23.6 billion, up 2.1% from the prior quarter end. Long-term debt increased 1.4% from the prior quarter end to $21.4 billion.OneMain Holdings’ Share Repurchase UpdateIn the reported quarter, the company repurchased 75 thousand shares for $3 million.Our View on OneMain HoldingsOneMain Holdings’ efforts to grow credit card and auto finance loans alongside relatively lower interest rates and strategic acquisitions are expected to support its financials. Further, a decent balance sheet and liquidity position are another positive. However, rising expenses and deteriorating asset quality are woes.OneMain Holdings, Inc. Price, Consensus and EPS Surprise OneMain Holdings, Inc. price-consensus-eps-surprise-chart | OneMain Holdings, Inc. QuoteCurrently, OneMain Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of OMF’s PeersAlly Financial’s ALLY fourth-quarter 2024 adjusted earnings of 78 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line indicated a jump of 95% from the year-ago quarter.Results benefited from a rise in net finance revenues. Further, lower expenses and a decline in credit costs provided support. However, lower other revenues, a decline in net finance receivables and loans and deposits were the undermining factors for ALLY.Capital One’s COF fourth-quarter 2024 adjusted earnings of $3.09 per share handily surpassed the Zacks Consensus Estimate of $2.66. The bottom line also compared favorably with $2.24 in the prior-year quarter.COF’s results gained from higher NII and non-interest income along with rise in loans and deposits. Also, provisions declined during the quarter. However, the increase in expenses was the undermining factor.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Capital One Financial Corporation (COF): Free Stock Analysis Report Ally Financial Inc. (ALLY): Free Stock Analysis Report OneMain Holdings, Inc. (OMF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks