BID Sothebys

Sotheby's revenue fell less than expected in the latest quarter and profitability improved as the auction house faces a fresh round of activist pressure.

"While we would certainly prefer to see a stronger art market, we are pleased with the progress we have been making on our strategic initiatives and the beneficial changes to our team and organization," said Chief Executive Tad Smith. "When the art market improves—and it certainly will—our company is poised to do very well for shareholders." Until then, Mr. Smith said, the company will continue being careful with its capital.

Last month, a Chinese life insurance company run by the grandson-in-law of Chairman Mao Zedong disclosed it bought a 13.5% stake in Sotheby's, citing a "positive view" of the auction house and potential interest in a board seat.

The move makes Taikang Life Insurance Co., one of China's biggest insurance companies, the largest shareholder of Sotheby's, eclipsing stakes held by hedge-fund managers such as Third Point's Dan Loeb, who owns 11.38%, and Point72 Asset Management's Steven Cohen, who owns 5.5%.

Last year, the New York-based company named Mr. Smith its CEO amid increasing clamor from activist shareholders for a leaner, more profitable business.

For the June quarter, Sotheby's reported a profit of $88.9 million, or $1.52 a share, up from $67.5 million, or 96 cents a share.

Sotheby's said adjusted profit rose to $1.51 a share, above analyst estimates for $1.05 a share. Revenue slid 10% to $298.7 million, on lower agency commissions and fees and inventory sales, but cam in above analysts' forecasts of $291 million.

Shares in the company, inactive premarket, have risen 25% so far this year.

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

(END) Dow Jones Newswires

August 08, 2016 08:05 ET (12:05 GMT)

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