Sotheby's 1st Quarter Income

Skates is reporting on a 1st quarter 2015 drop in revenue of .7%, at $155.7 million. The Skates analysis of the Sotheby's returns shows revenue from private sales falling by half from the 1st quarter of 2014 when compared to the 1st Quarter 2915.  The figures were $25 million in 2014 and only $13 million in 2015. The area of Sotheby;s revenue growth has been in financing sales, with income more than doubling from $5.7 million to $12.7 million,

The overall outlook is rather positive, as Sotehby's transitions under new leadership.  It will be an interesting year or so to see how Sotheby's handles internal change.

Skates reports

Sotheby’s published its Q1 2015 accounts today. Revenues are down by 0.7% to $155.7 million driven by the continuous decline in private sales (so called “Principal” business segment of Sotheby’s) where revenues halved from $26 million in Q1 2014 to $13 million in Q1 2015.

As predicted by Skate’s many months ago, the steady meltdown of private sales correlates with the exit timeline for Mr. Ruprecht, the former CEO. To add to this transitioning pain (decline of private sales revenue), Sotheby’s also booked $4.2 million in “CEO separation and transition costs”1 in Q1 2015.

Sotheby’s is compensating the loss of business in the private dealing segment with a surge in finance revenue (which more than doubled from $5.7 million in Q1 2014 to $12.7 million in Q1 2015) and a small yet visible increase in core auction revenue (the Agency segment revenue increased from $123.1 million in Q1 2014 to $127.9 million in Q1 2015, with this increase largely driven by the hike in auction commission fees, see Skate’s coverage for more on Sotheby’s new rates).

All in all Sotheby’s seem to have a far better control over its costs now and moved back to profitability in the traditionally slow first quarter, with $5.2 million net income in Q1 2015 compared to $6.1 million loss a year ago.

So far so good as Sotheby’s transitions into the new leadership style and strategy – Q2 results however will be the real judgment day as they will include major auctions and the first signs of whether Sotheby’s partnership with eBay is bearing any fruit.

Source: Skates