Sotheby's Posts 3rd Quarter Loss

As of Friday afternoon, November 7th Sotheby's has released third quarter financials, revealing a 2008 loss of $46.2 million. Sotheby's was reporting operating income for the 3rd quarter at $76 million, yet most of the loss was from $42 million in lot guarantees. Sotheby's did state in the financial report that in this period of economic market turmoil, Sotheby's remains liquid. On the positive side, Sotheby's has total revenue of $525.4 million for the first 9 months of 2008 with a 9 month net income of $36.78 million. A poor 4th quarter, such as the third quare could easily wipe away most of the net income gains. Remember, most of the struggles have been in the third quarter, and I am not sure if fourth quarter sales expectations are going to improve much.

Bill Rupercht, Sotheby's CEO and President stated We are very prudently positioned going forward. Through reducing guarantee activities, resizing our organization and receiving a level of return from consignors which reflect our services, it is both our expectation and our goal that we will be meaningfully profitable at significantly lower sales levels even during these uncertain times.

Rupercht continued We have reduced our guarantee position by 52% as compared to last year and our net guarantee exposure is $114 million. In this period of considerable economic instability, we will dramatically reduce the guarantees and other special concessions we grant to sellers in order to achieve a more balanced and equitable return for our services.

Very interesting comments by Rupercht in reducing the guarantees and other special concessions. In this market, with downward pressure the risks are just too high.

To read the full Sotheby's financial filing at MarkWatch, click HERE.

Since Christie's is a privately held corporation, corporate financial figures are typically not released.