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.”