Sotheby’s Profit Falls 8% as Auction Revenue DeclinesKatya Kazakina
Sotheby’s, the publicly traded auctioneer of fine art and collectibles, said fourth-quarter profit fell 7.6 percent as auction revenue declined and it refinanced debt.
The New York-based company’s net income fell to $66.1 million from $71.5 million a year earlier. It earned 96 cents a share, less than the average $1.10 estimate of four analysts surveyed by Bloomberg. Quarterly revenue rose 2.4 percent, to $291.1 million.
William F. Ruprecht, Sotheby’s chairman and chief executive officer, said in a conference call that the profit drop was “skewed in a very significant part by the unprecedented level of single-owner sale events we had in 2011 which we were not so lucky to have in 2012.”
Sotheby’s shares rose 18 cents today to $38.23 in New York Stock Exchange composite trading. They’re down 4 percent for the past 12 months, as Standard & Poor’s 500 Index rose 10 percent.
The auction house said it incurred a loss of $8.3 million, or 12 cents a share, from refinancing debt that will save it $5 million per year beginning in 2014. It said the comparison with the year-ago quarter was hurt by a $13.6 million tax benefit recognized in 2011.
Sotheby’s said it will increase its buyer’s commission for the first time in almost five years. Rival Christie’s announced a similar step earlier this month.
Starting on March 15, Sotheby’s will charge buyers 25 percent on the first $100,000 of the hammer price; 20 percent on the portion of the hammer price above $100,000 up to and including $2 million; and 12 percent on any amount above $2 million.
Previously, buyers paid 25 percent commission on the first $50,000, 20 percent between $50,000 and $1 million and 12 percent on any amount in excess of $1 million.
The new fees may go some way to addressing declining auction revenues. In 2012 auction commission revenues fell 11 percent to $622 million while private sales grew 10 percent to $75 million.
The results and commission increase were released today after the close of regular trading.
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