NEW YORK—Sotheby’s fourth-quarter and full year 2010 earnings posted on Feb. 28 self-reportedly marks the second-highest profit for the house as the international art market rebound continues.
Net income for 2010 was $161 million, which CEO Bill Ruprecht said is “our best yearly result ever, apart from 2007.” By comparison, net income in 2007, amid the height of the art market boom, was $213.1 million (ANL, 3/4/08). The number of lots sold for over $1 million each in 2010 was 609, roughly double the 307 lots recorded in 2009.
Ruprecht added: “The recovery of the global art market, which was aided in part by the increased buying activity of clients from new markets, certainly contributed to these results, as did the difficult decisions we had to make beginning in the autumn of 2008,” including headcount reduction, tightening the cost structure and focusing on auction commission margins.
Sotheby’s said fourth-quarter net income was $96.2 million, up 31 percent from the $73.6 million realized in the 2009 fourth quarter. The reported $161 million in net income for the full year 2010 was up substantially from a net loss of $6.5 million reported for 2009.
Ruprecht noted that the results were achieved with “a much lower risk profile than in the previous peak years of 2006 and 2007,” when the house lost substantial sums of money by extending auction guarantees to consigners. “We have been highly selective in our use of auction guarantees,” Ruprecht said.
Despite the upbeat results and positive outlook, shares of Sotheby’s fell on the New York Stock Exchange the following day alongside overall declines in the major stock market indices. At midday on March 1, shares of Sotheby’s stock were trading down $2.70, or 5 percent, at $46.54. As ARTnewsletter was published, shares were trading higher, at $49.61.