Sothebys Third Quarter Earnings Sneak Peek

Sothebys (NYSE:BID) will unveil its latest earnings on Wednesday, November 7, 2012. Sothebys is an auctioneer of authenticated fine art, antiques and decorative art, jewelry, and collectibles.

Sothebys Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for a loss of 47 cents per share, a wider loss from the year-earlier quarter net loss of 30 cents. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 22.8% compared to last year’s $1.79.

Past Earnings Performance: Last quarter, the company fell short of estimates by 0 cents, coming in at profit of $1.24 per share against a mean estimate of net income of $1.49. The company fell in line with expectations in the first quarter.

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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.45 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 3.0 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased more than threefold to $1.2 billion while assets rose 66.5% to $1.74 billion.

A Look Back: In the second quarter, profit fell 32.9% to $85.4 million ($1.24 a share) from $127.2 million ($1.81 a share) the year earlier, missing analyst expectations. Revenue fell 17.8% to $303.9 million from $369.8 million.

Stock Price Performance: Between October 26, 2012 and November 1, 2012, the stock price rose $2.17 (7%), from $30.79 to $32.96. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 13, 2012, when shares rose for eight straight days, increasing 13.8% (+$3.90) over that span. It saw one of its worst periods between May 7, 2012 and May 18, 2012 when shares fell for 10 straight days, dropping 20.8% (-$7.69) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 10.6% in the fourth quarter of the last fiscal year and 12.2% in first quarter before falling again in the second quarter.

Wall St. Revenue Expectations: Analysts predict a decline of 2.8% in revenue from the year-earlier quarter to $56.6 million.

Analyst Ratings: With two analysts rating the stock as a buy, one rating it as a sell and two rating it as a hold, there are indications of a bullish outlook.

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

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