Aug. 5 (Bloomberg) -- Sotheby's, the world's largest publicly traded auction house, said second-quarter profit fell 11 percent after it shifted its London contemporary-art sales to the third quarter from the second.

Net income was $95.3 million, or $1.46 a share, surpassing the $1.38 estimate of six analysts compiled by Bloomberg. Shares rallied $1.02, or 3.7 percent, to $28.50 in extended trading.

Chief Executive William Ruprecht said profit would have increased were it not for the new auction schedule. He said wealthy people with more than $100 million -- who are insulated from economic woes -- remain their best customers.

``We are encouraged by the state of our business,'' he said, with ``the economic elite continuing to drive our business.''

Operating income was $150.9 million, within the $135 million to $160 million range Sotheby's set in June.

``I know it's counter-intuitive, but amazingly it's remained strong,'' George Sutton, an analyst with Craig-Hallum Capital Group in Minneapolis, said about Sotheby's business before the earnings release. ``The demand side is very strong. It's driven by commodity wealth, particularly in oil.''

Commission revenue for every $100 in auction sales was $15.10 for the second quarter, up from $13.60 in the first quarter but below the year-ago $16. Ruprecht said the company continues to cut back on guarantees to sellers to reduce its risk.

In the first quarter, the company disappointed investors with a first-quarter loss and said revenue from auctions declined.

Before the rally in extended trading, the shares were off 28 percent this year.

To contact the reporter on this story: Philip Boroff in New York at pboroff@bloomberg.net.

Last Updated: August 5, 2008 17:57 EDT