Sotheby’s said its first-quarter loss doubled as auction profits fell and expenses rose.
The New York auctioneer lost $22.3 million, or 33 cents a share, compared with a loss of $10.7 million, or 16 cents a share, a year ago. Revenue fell 3 percent to $101.7 million.
The average estimate of five analysts surveyed by Bloomberg was a loss of 12 cents. The auctioneer typically posts a small loss or profit in the first and third quarters. Its biggest auctions are held in the second and fourth quarters.
Expenses rose 8 percent to $123 million, which the company attributed to developing its “presence in growth markets.”
Sotheby’s said that although auction sales increased, the improvement was in the competitive categories of Impressionist, modern and contemporary art. The auctioneer often shares its buyer’s commission with a consignor to win the right to sell a valuable work.
“The first quarter showed a solid increase in auction sales compared to the prior year, but the results illustrate how competitive the market is for the highest-value consignments,” said William Ruprecht, chairman and chief executive officer, in a statement.
“That competition resulted in lower commission margins, which is reflected on the bottom line,” he said.
Commission revenues for every $100 in auction sales declined from $18.10 to $15, Sotheby’s (BID) said. It said an increase in the buyer’s premium enacted in March would improve margins.
Ruprecht said in a conference call with analysts that there’d be a jump in the second quarter. Margins were $15.30 for every $100 in sales in the second quarter of 2012.
On Tuesday night, the auctioneer sold $230 million of Impressionist and modern works in New York, its second-highest tally since 2008. Contemporary sales are next week.
Sotheby’s shares are up about 8 percent this year but below their closing high of $57.64, set in October 2007. Today, they rose 6 cents to $36.31 in New York Stock Exchange trading.
In 2012, Sotheby’s said it accounted for 46 percent of the auction sales of fine art and decorative art, jewelry and collectibles worldwide between the two major auction houses, down from 51 percent in 2011. Annual profit dropped 37 percent to $108 million.
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