NEW YORK—Amid the continuing strength of the international art market, Sotheby’s Holdings reports a surge in fourth-quarter earnings and overall sales for 2005. In an earnings report released March 7, the auction house says the 12 months ending Dec. 31 marked the high point of the past 15 years, attributing the strong results largely to higher auction and private-sale commissions.
For the fourth quarter ending Dec. 31, Sotheby’s posted income from continuing operations (a key measure of profitability) of $51.7 million, or 90 cents a share, compared with $36.1 million, or 57 cents a share, in the year-ago period. Sotheby’s says fourth-quarter auction and related revenues rose to $200.6 million, marking its highest fourth quarter ever and representing a $25.1 million, or 14 percent, increase over the previous fourth quarter.
Auction and related revenues for the full year 2005 totaled $502 million—a 13 percent, or $58.9 million, increase from 2004, “largely due to a significant improvement in auction commission margins, attributable to the increase in buyer’s premium rates in January 2005 and a favorable change in sales mix over the period.” In 2004, Sotheby’s notes, a greater proportion of auction sales came from high-end works of art, for which commission margins tend to be lower owing to competition from within the auction industry.
Sotheby’s president and CEO Bill Ruprecht calls it “our best year in 15 years and, without question, one of Sotheby’s best years ever. Very importantly, we see the momentum continuing into 2006.”
Looking at the high points of last year’s auctions, Ruprecht singles out the sale of the painting Venice—the Grand Canal . . ., by Canaletto (Giovanni Antonio Canal; 1697-1768), which sold in London for $32.5 million—“the year’s highest price at auction” (see ANL, 7/19/05). Ruprecht also cites the sculpture Cubi XXVIII, 1965, by David Smith, which fetched $23.8 million last fall—an auction record for a contemporary artwork (see ANL, 11/22/05).
He further notes the strength of sales in the emerging markets of Russia and China. Worldwide Asian sales totaled $248 million, up 47 percent; worldwide Russian sales hit a record $135.6 million, up 166 percent.