Sotheby's 3Q loss widens
Sotheby's third-quarter loss widened as the art auction house posted a worst-than-expected decline in revenue and a tax expense.
Auction houses have been struggling to secure enough top materials to entice bidders, as the economic downturn is forcing them to rely heavily on individuals to sell art for personal reasons. The company's business is highly cyclical, according to Moody's Ratings Services, which said it expects Sotheby's to weather the current downturn while maintaining good liquidity.
But Sotheby's held a key round of sales last month that showed prices are already bouncing back for European artists with loyal followings. And sales of the company's Impressionist and modern art on Wednesday exceeded expectations.
Sotheby's reported a loss of $57.8 million, or 89 cents a share, compared with a year-ago loss of $47 million, or 73 cents a share. The latest results were hurt by a $10.8 million tax provision expense, compared with a year-ago benefit of $21.2 million. The company has posted four losses over the last five quarters.
Revenue plunged 41% to $44.9 million, as auction sales dropped 36%.
Analysts surveyed by Thomson Reuters expected a loss of 31 cents on revenue of $61 million.
Auction commission margins rose to 22.7% from 15.2% on a change in sales mix.
Shares closed at $18.21 and were inactive in after-hours trading. The stock, which rallied 15% in the regular session, has more than doubled this year.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com [ 11-05-09 1627ET ]
del.icio.us
Digg
Newsvine
reddit
StumbleUpon