Sotheby's Suspends Dividend, To Repatriate Foreign Earnings To Fund More Buybacks

By Markets MarketWatch Pulse

Sotheby's said Friday it will suspend its quarterly dividend, effective immediately, and has decided to repatriate foreign earnings, to help fund a $200 million increase to its stock repurchase program. The auction house disclosed in a regulatory filing that it expects a fourth-quarter loss of $10 million to $19 million, or 15 cents to 29 cents a share, compared with a profit of $74 million, or $1.06 a share, in the same period a year ago. Excluding non-recurring items, such as a non-cash charge of $63 million to $68 million for taxes associated with foreign earnings, adjusted EPS is expected to be $1.11 to $1.17, above the FactSet consensus of 84 cents. The company said it had previously expected to reinvest the foreign earnings of about $381 million outside the U.S. to avoid U.S. income taxes, but said the increase in share repurchases and the need for cash in the U.S. made it necessary to repatriate the funds. The stock, which was still inactive in premarket trade, has plunged 33% over the past three months, while the S&P 500 has lost 8.9%.

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