BID Sothebys

Sotheby's reported a much deeper-than-expected loss in the first quarter of the year as the company reported a 35% decline in net auction sales, driving a 33% slide in auction commission revenue.

"As we exited 2015, it was clear that the significant market growth experienced in 2014 and the first part of 2015 had slowed somewhat, and the impact can be felt in our results for the first quarter," said Chief Executive Tad Smith. Still, Mr. Smith noted the company had seen "a number of high points so far in the second quarter, including a 17% sales increase in our April Hong Kong series."

He said the most significant indicators on the current state of the market will come in the next two weeks of auctions in New York and Geneva. "We are cautiously optimistic about these sales," he said.

In all for the quarter ended March 31, the Sotheby's reported a loss of $25.9 million, or 41 cents a share, compared with a year-earlier profit of $5.2 million, or seven cents a share. Sotheby's posted an adjusted loss of 35 cents a share, worse than analysts' expectations of a 23-cent loss.

Revenue fell 32% to $106.5 million, below analysts' forecasts of $125 million.

In the first quarter, revenue from agency commissions and fees plunged to $81 million from $127.9 million. Finance revenue rose to $14.8 million from $12.7 million, while inventory sales nearly halved to $6.8 million from $12.7 million.

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

Shares, inactive premarket, have added 19% over the past three months.

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

(END) Dow Jones Newswires

May 09, 2016 08:25 ET (12:25 GMT)

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