May 1 (Bloomberg) -- Ally Financial Inc., the lender rescued by the U.S. government during the 2008 financial crisis, said profit fell 79 percent in its first report as a publicly traded company.
First-quarter net income declined to $227 million, or 33 cents a share, from $1.1 billion, or $2.16, a year earlier, the Detroit-based company said today in a statement. Core pre-tax income of $336 million compared with a loss of $6 million a year earlier.
Chief Executive Officer Michael Carpenter has refocused Ally, the former finance subsidiary of General Motors Co., on its auto-lending roots. To improve profitability, Carpenter said last month he plans to reduce expenses by $400 million and expand commercial banking.
“Investors have fairly high expectations with regard to non-interest expense reductions in the near term,” Mark Palmer, an analyst at BTIG LLC in New York, said in a April 29 note. Palmer, the only analyst in Bloomberg’s survey following Ally, estimated net income would be 42 cents. He has a buy rating on the stock.
Shares of Ally, which began trading publicly on April 10 at $25, closed at $24.15 yesterday.
The U.S. Treasury Department raised $2.38 billion by selling shares of Ally in an initial public offering last month, trimming its stake in the company to about 17 percent.