Sotheby’s Earnings: Revenues and Net Income Fall, Stock Follows

Sotheby’s (NYSE:BID) posted a decrease in profit as revenue declined. Sothebys is an auctioneer of authenticated fine art, antiques and decorative art, jewelry, and collectibles.

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Sotheby’s Earnings Cheat Sheet for the Second Quarter

Results: Net income for Sotheby’s fell to $85.4 million ($1.24 per share) vs. $127.2 million ($1.81 per share) a year earlier. This is a decline of 32.9% from the year-earlier quarter.

Revenue: Fell 17.8% to $303.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sotheby’s fell short of the mean analyst estimate of $1.51 per share. It beat the average revenue estimate of $94.2 million.

Quoting Management: “Our operating results reflect some tremendous successes, but also reflect the challenging global economy, a tough comparison to the best quarter in Sotheby’s history a year ago, and a competitive climate for high-end consignments,” said Bill Ruprecht, President and Chief Executive Officer. “Demand and prices remain strong, especially at the high end of the market, as reflected in our highest ever sale of Impressionist and Modern Art of $373.3 million in May in New York.

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 12.2% to $105 million in the first quarter. The figure fell 10.6% in the fourth quarter of the last fiscal year from the year earlier and dropped 20.3% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with a loss of -16 cents.

After widening in the previous quarter, margins narrowed in the first quarter. Gross margin dropped 1.8 percentage points from the year-earlier quarter to 88.9%. In the fourth quarter of the last fiscal year, the figure rose three percentage points from a year ago to 90.6%.

After sitting in the red the quarter before, the company reported a profit last quarter. In the fourth quarter of the last fiscal year, the company booked a net loss of $71.5 million, or a loss of $1.03 per share.

Looking Forward: Over the past thirty days, the average estimate for the company’s performance next quarter have gone from a loss of 43 cents per share to a loss of 45 cents, indicating that analysts are increasingly pessimistic about third quarter. The average estimate for the fiscal year is $2.43 per share, down from $2.75 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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