Sotheby's Posts Wider-than-expected Loss, But Revenue Beats

Auction house Sotheby's said Monday it had a net loss of $54.5 million, or 99 cents a share, in the third quarter, wider than the $17.9 million loss, or 26 cents a share, reported in the year-earlier period. Excluding acquisition-related and other charges, the per-share loss was 78 cents, wider than the 57 cents loss consensus from analysts polled by FactSet. Revenue fell to $91.5 million from $137.9 million, but was ahead of the FactSet consensus of $75.8 million. "As we communicated previously, the third quarter results were not expected to be good," Chief Executive Tad Smith said in a statement. "Underneath our seasonally low level of sales, there were encouraging but tentative indicators that the market could be looking for a rallying point." Smith said factors driving the net loss included a change in the timing of the summer Contemporary Art sales in London, which were held in the second quarter after taking place in the third quarter of 2015. That shift accounted for $197 million of the $211 million decline in net auction sales from quarter to quarter. The company reported a $15 million swing in inventory activities. Partly offsetting those factors, was an improvement in commission margins and lower level of stock-based compensation expense. The company also took a charge related to the acquisition of Art Agency, Partners. Shares were not yet active in premarket trade, but are up 37% in the year so far, while the S&P 500 has gained 2%.