SOTHEBY’S ANNOUNCES 2011 FIRST QUARTER RESULTS First Quarter Revenues Increase 17% to $119.6 million - First Quarter Profitable with Net Income of $2.4 million as compared to a Net Loss of ($2.2) million in the prior year
News-Antique.com - May 09,2011 - May 9, 2011, New York -- Sotheby’s (NYSE: BID) today announced results for the first quarter
ended March 31, 2011.
The first quarter has traditionally been a loss period for the Company because of the seasonal
nature of the art auction market. However, for the first quarter of 2011, the Company is
reporting net income of $2.4 million, or $0.03 per share, as compared to a net loss of ($2.2)
million or ($0.03) per share in the prior year. This improvement is principally due to higher
auction commission revenues resulting from a 23% increase in net auction sales, partially offset
by a decline in auction commission margin from 17.2% to 16.4%, which is attributable to sales
mix. In the first quarter, there was an increase in works of art sold in the upper price bands,
including a 63% increase in the number of works sold over $1 million (from 62 to 101 lots).
Competitive pressures to win these high value consignments resulted in lower commission
margins as Sotheby’s sales approached the peak levels of 2006 - 2008.
The improvement vs. 2010 is partially offset by a $14.7 million, or 16%, increase in operating
expenses. A portion of this increase ($4.2 million) is attributable to higher dealer cost of sales
principally due to $2.6 million in inventory writedowns and increased dealer sales revenues.
Total operating expenses, excluding dealer cost of sales, increased $10.5 million, or 11%*, from
the prior period. First quarter results also benefited from a recovery of $3.0 million as a result of
the resolution of a litigation matter. This recovery relates to interest earned on the overdue
balance ($2.2 million), compensation for lost auction commissions ($0.4 million) and the partial
reimbursement of legal fees ($0.4 million).
“This is one of our best first quarters on record,” said Bill Ruprecht, President and Chief
Executive Officer of Sotheby’s. “It is all the more impressive given the outstanding first quarter
of 2010, which included one work by Giacometti which sold for an unprecedented $104.3
“Sales are up year to date by 31%, continuing the positive momentum into the second quarter of
2011,” continued Mr. Ruprecht. “Our Hong Kong sales have been a major contributor, bringing
a record total of $447 million, near the high end of the pre-sale estimate and showing the depth
and breadth of wealth in that region. And our Impressionist and Modern Art sales last week
brought a solid $209.5 million with works that were fairly and conservatively estimated bringing
particularly strong prices.
“Going forward, we are very pleased with the quality of the works we are able to offer at
Sotheby’s around the world, concluded Mr. Ruprecht. “We have a number of outstanding works
on offer in our New York Contemporary Art sales which begin this evening and will continue
into a second evening sale tomorrow. An important collection of Chinese Paintings will take
place in Hong Kong at the end of May and we have excellent sales in London later this spring,