Sotheby's 2018 Earnings Report

The NY Times reports on earnings from last year at Sotheby's. There is some good news, such as sales increased by 16% over 2017, reaching a total of $6.4 billion. Also, private sales ere up 37% to $1 billion. But there was also some disturbing news, not surprisingly high level guaranteed lots saw many losses, and overall profitability declined from $118.8 million in 2017 to $108.6 million in 2018.

The NY Times reports

Last year, Sotheby’s sold $6.4 billion worth of artworks worldwide, a 16 percent increase over 2017, the New York-based auction house said Thursday, announcing its full-year financial results. Earlier this month its archrival Christie’s announced equivalent 2018 sales of $7 billion.

Sotheby’s said its 2018 performance had been bolstered by $1 billion in private sales, up 37 percent from the previous year. But profitability was down. The auction house achieved a net income of $108.6 million, or $2.09 per diluted share, compared with $118.8 million, or $2.20 per diluted share, in 2017.

Sotheby’s incurred significant losses on some high-value lots guaranteed at auctions, such as a Modigliani nude, which sold below the amount promised to the seller for $157.2 million in May, and a $30 million abstract, “Pre-War Pageant,” by the American modernist Marsden Hartley that failed to sell in November. The following month, Adam Chinn, the company’s chief operating officer, stepped down and his role was eliminated.

But Sotheby’s said it had achieved notable auction highs for contemporary artists such as Kerry James Marshall and Jenny Saville, and had raised $1 billion in auction sales in Asia, the highest total for the company. The auction house’s investment in new technology had resulted in $72.1 million of online-only sales, four times the total of the previous year.

“Over all, you will see a company in great shape for the future,” said Tad Smith, president and chief executive. He added that the “expectation for our company in 2019 is favorable,” but acknowledged that “the range of outcomes has a bit more uncertainty than when we entered 2018,” because of factors like geopolitics.

This year Sotheby’s will celebrate its 275th anniversary. At 12:20 p.m. Eastern on Thursday its stock, the oldest listed on the New York Stock Exchange, was trading at $44.07 per share, up 3.2 percent, and slightly above the price of $42.26 at which the company’s stock was valued on March 1, 2015, just before Mr. Smith was appointed chief executive.

Source: The NY Times 

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