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NEW YORK - On Friday, OneMain Holdings, Inc. (NYSE:OMF) reported third-quarter earnings that significantly exceeded analyst expectations, driven by strong revenue growth and improving credit trends.
The nonprime consumer lender’s shares rose 4.04% in pre-market trading after the results.
The company reported adjusted earnings per share of $1.90 for the third quarter, beating the analyst estimate of $1.61 by $0.29. Revenue came in at $1.24 billion, slightly above the consensus estimate of $1.23 billion. Total revenue, comprising interest income and other revenue, increased 9% YoY to $1.6 billion, primarily due to receivables growth and improved portfolio yield.
"We delivered excellent third quarter results with encouraging momentum in revenue growth and continued positive credit trends," said Doug Shulman, Chairman and CEO of OneMain. "Our ability to both innovate and execute positions us well to drive shareholder value in the near and long-term."
Managed receivables, which includes loans serviced for whole loan sale partners and auto finance loans originated by third parties, grew 6% YoY to $25.9 billion. Consumer loan originations totaled $3.9 billion in the quarter, up 5% from $3.7 billion in the prior year period.
Credit quality showed improvement, with the net charge-off ratio decreasing to 6.67% compared to 7.33% in the same quarter last year. The 30+ days delinquency ratio also improved to 5.55% from 5.63% a year ago.
In a move to enhance shareholder returns, OneMain raised its quarterly dividend by 1% to $1.05 per share and announced a new $1.0 billion share repurchase program. During the quarter, the company repurchased approximately 540,000 shares of common stock for $32 million.
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