ARTnewsletter Archive

Sotheby’s Third-Quarter Loss Higher Than a Year Ago

On Nov. 9, Sotheby’s Holdings posted results for the quarter ending Sept. 30. The auctioneer said its loss from continuing operations had widened in the third quarter—from $21 million, or 35 cents a share, in the third quarter of 2005 to $30.4 million, or 49 cents a share. At the same time, operating revenues for

NEW YORK—On Nov. 9, Sotheby’s Holdings posted results for the quarter ending Sept. 30. The auctioneer said its loss from continuing operations had widened in the third quarter—from $21 million, or 35 cents a share, in the third quarter of 2005 to $30.4 million, or 49 cents a share. At the same time, operating revenues for the quarter rose slightly, up 2 percent, to $57.4 million. (Christie’s, which is privately held, does not release detailed financial reports.)

The $9.4 million decline, Sotheby’s reported, is principally due to an $8.2 million, or 22 percent, increase in salaries and related costs; and a $6.7 million, or 24 percent, increase in general and administrative expenses. The higher costs are a result of “strategic head-count additions in key areas of the company, such as contemporary art, Russian art and Asian art,” according to a statement from Sotheby’s. All these sale categories have fueled considerable revenue growth in recent years.

In a conference call with analysts and investors, Sotheby’s CEO Bill Ruprecht pointed out that the third quarter, in which auction sales account for just 7-to-10 percent of the annual auction total, is historically a loss period for the company “because of the seasonal nature of the art market.”

Said Ruprecht: “Our responsibility at this time is to balance strategic investment spending, which takes advantage of the current robust environment, while continuing a rigorous focus on costs. As the 73 percent increase in our fourth-quarter Impressionist and modern results and the 39 percent increase in year-to-date sales make clear, the art market is extremely vibrant, and we certainly expect a strong market and sales for the remainder of the year.”

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