Sotheby's Q2 Results Miss Estimates

(RTTNews) - Auction house Sotheby's (BID) reported Friday a profit for the second quarter that declined 15 percent from last year, despite 18 percent higher auction sales, hurt by special charges. Both adjusted earnings per share and quarterly revenues missed analysts' expectations.

"Sotheby's is seeing success across categories and around the world. The number of buyers at all levels, the amount of property we were entrusted to sell, and the prices we achieved are all up significantly this year," Chairman, President and CEO Bill Ruprecht said in a statement.

New York-based Sotheby reported net income of $77.63 million or $1.11 per share for the second quarter, lower than $91.73 million or $1.33 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $87.84 million or $1.26 per share, compared to $91.73 million or $1.33 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $1.43 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that results for the latest quarter were boosted by a 19 percent increase in net auction sales, reflecting the continuing strength of the global art market, particularly in Hong Kong and London, and by excellent spring sales worldwide.

Total revenues for the quarter increased to $335.82 million from $304.87 million in the same quarter last year, but missed six Wall Street analysts' consensus estimate of $345.98 million.

Agency revenues increased to $316.19 million from $294.94 million last year.

During the second quarter, London's June Impressionist and Modern Art sales brought $247.3 million, London Contemporary Art sales realized $184.6 million, and July Old Master and British Paintings sales series sales totaled a record $127.4 million.

Operating income for the quarter decreased 2 percent to $130.43 million from $133.31 million in the prior-year quarter as total expenses grew to $205.39 million from $171.55 million a year ago, including special charges of $18.55 million.

Income tax expense also grew to $45.34 million from $30.71 million a year ago.

The company noted that in July it announced a restructuring plan that will reallocate resources to collecting categories and regions with the highest potential for growth and to further reduce costs.

The company is currently engaging in the reallocation of staff and resources to achieve costs savings and to focus resources and people on areas with the greatest growth opportunities.

"We're looking forward to building on the successes of these six months with a number of exceptional sales this fall and with our new eBay partnership that will showcase our New York auctions to an unrivaled global online audience of millions of potentially new collectors," Ruprecht added.

BID closed Thursday's regular trading session at $40.69, down $0.05 on a volume of 0.81 million shares.