BID Sothebys

Sotheby's on Friday swung to a loss in the final quarter of the year as the company booked a hefty income tax charge on the repatriation of foreign earnings.

Still, adjusted profit and revenue beat expectations as the auction house wraps up a year of transition.

"We will likely have one or more difficult quarters as we ride through the current cycle, but we are being careful on guarantees and capital commitments, watching our liquidity carefully," Chief Executive Tad Smith said.

Last month, the company said it would eliminate its quarterly dividend and warned it needed to repatriate overseas earnings at a steep cost. It said it planned to bring home foreign earnings to address "the need for cash in the U.S." and the company's expanded stock-buyback program.

In the quarter ended Dec. 31, the company reported a loss of $11.2 million, or 17 cents a share, compared with a year-earlier profit of $73.9 million, or $1.06 a share. Adjusted earnings were $1.19 a share.

The company recorded an income-tax charge of $65.7 million related to the planned repatriation of foreign earnings and another charge of $23.6 million related to voluntary separation incentive programs implemented in the quarter.

Revenue fell 4.4% to $335.8 million.

In January, the company said it expected an adjusted per-share profit of $1.11 to $1.17 for the quarter. Analysts surveyed by Thomson Reuters forecast revenue of $331 million.

In the fourth quarter, finance revenue rose to $12.9 million from $10.3 million, while inventory sales climbed to $35.5 million from $29 million. But revenue from agency commissions and fees fell to $284.2 million from $309.6 million.

The venerable auction house has been on a roller-coaster for a few years, welcoming Mr. Smith as its new chief executive last March amid increasing clamor from activist shareholders calling for a leaner, more profitable business.

Shares in the company, down 17% over the past three months, were inactive premarket.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 26, 2016 08:35 ET (13:35 GMT)

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