May 7 (Bloomberg) -- Sotheby's, the world's largest publicly traded auction house, reported a first-quarter profit of $24.3 million, reversing a year-earlier loss, because of record sales of modern and contemporary art in London.

The company said income from continuing operations was 37 cents a share, compared with a loss a year earlier of $3.94 million, or 7 cents a share, Sotheby's said today in a statement. Revenue rose 54 percent to $147.4 million.

``A number of collecting categories across the world are experiencing growth,'' Sotheby's Chief Executive Officer Bill Ruprecht said in a statement. He cited ``London's best Impressionist and modern art and contemporary sales ever'' as one of the biggest contributors.

He also pointed to record prices for Old Master paintings and record sales of Asian art in New York.

Sotheby's shares, which have quintupled since 2003, rose $2.11, or 4.2 percent, to $52.14 at 4:16 p.m. in New York Stock Exchange composite trading.

``There's wealth accumulating around the world that's driving demand for art,'' said George Sutton, an analyst with Minneapolis-based brokerage Craig-Hallum Capital Group, who has a ``buy'' rating on the stock. ``There are two primary beneficiaries, and only one is publicly traded.'' Sotheby's larger competitor, Christie's International, is owned by French billionaire Francois Pinault.

Gain, Writedown on Gallery

Sotheby's reported a one-time gain of $20 million from a life insurance recovery related to the January death of Robert Noortman, who owned an Old Master gallery that Sotheby's bought last year. Excluding the gain and a $15 million charge to write down the value of the Noortman gallery, profit was 25 cents a share. Three analysts surveyed by Bloomberg forecast earnings of 6 cents a share.

Expenses rose 43 percent to $134.7 million. Salaries and other compensation costs rose 25 percent to $54.8 million.

Sotheby's typically posts small losses in the first and third quarters and larger profits in the second and fourth periods, when its biggest auctions are held. It holds Impressionist and modern art sales tomorrow in New York.

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

Last Updated: May 7, 2007 16:27 EDT