Sotheby's on Friday reported weaker-than-expected profits and
sales for its latest quarter as currency headwinds and the shifting
of a contemporary art sale to later in the year dented the top
line.
The auction house experienced a $12.4 million hit to currency
impacts for the quarter ended June 30, the first completed
three-month period posted under new Chief Executive Tad Smith.
Sotheby's also said losses from the sale of a single painting also
hurt results.
The company said an increase in private sale commission and an
improvement in auction-commission margins partially offset the
currency headwinds and the shift in its events calendar.
Private sales commissions increased 32%, boosted by growth in
high-value transactions, the auctioneer reported. Sotheby's said it
also benefited from growth in its financial services loan
portfolio, which had a 30% increase and contributed $24.7 million
to revenue.
Overall for the latest quarter, Sotheby's reported a profit of
$67.6 million, or 96 cents a share, compared with a year-earlier
profit of $77.6 million, or $1.11 a share. Excluding certain items,
including costs associated with the leadership transition,
per-share earnings fell to $1.04 from $1.26.
Revenue fell 1.1% to $332 million.
Analysts surveyed by Thomson Reuters expected a profit of $1.24
a share and revenue of $342 million.
The venerable auction house has had a roller-coaster few years,
welcoming a new top executive amid increasing clamor from activist
shareholders calling for a leaner, more-profitable business.
Sales at the New York-based company reached a high of $6.7
billion last year. But the two-year shake-up led by Sotheby's
largest shareholder, Dan Loeb of Third Point LLC, has proved
tumultuous. Mr. Loeb joined Sotheby's board last year only after
the company ousted several members of management and its chief
auctioneer, Tobias Meyer.
Mr. Smith, the former CEO of Madison Square Garden Co., took
over for William Ruprecht after the departing executive agreed to
step down last November as investors agitated for more profits for
shareholders.
On Friday, along with its latest quarter results, Sotheby's
board approved an increase of $125 million to its remaining
share-repurchase allotment for a total of $250 million.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
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