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OneMain reports lower quarterly profit despite revenue increase

Second-quarter net income fell to $152 million while the net charge-off ratio rose to 7.77%, reflecting weaker credit performance alongside 6% revenue growth.

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OneMain Holdings reported second-quarter net income of $152 million and diluted earnings per share of $1.32, down from $167 million and $1.40 a year earlier, even as total revenue rose 6% to $1.62 billion above analysts’ expectations, according to MarketBeat Ratings.

The company said managed receivables increased 6.5% to $26.9 billion, and consumer loan originations rose 10% to $4.3 billion, helped by growth across personal loans, auto finance, and its newer credit-card business. Auto originations climbed 19% year over year, credit card accounts grew 44%, and purchase volume increased 57%.

OneMain’s provision expense for finance receivables rose more than 19% to $610 million, and the consumer loan net charge-off ratio moved higher to 7.77% from 7.19% a year earlier, though it was down from 8.02% at the end of March.

MarketBeat Ratings also noted that OneMain is expanding customer accounts, surpassing 4 million for an increase of 14% from a year ago, while facing ongoing scrutiny tied to state lawsuits over sales practices. Analysts maintain a Moderate Buy stance and have recently boosted targets while reiterating Buys, the outlet said.

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