Dallas, Texas 05/08/2014 (FINANCIALSTRENDS) – Sothebys (NYSE:BID) reported a sharp reduction in loss for the first quarter of 2014, based primarily on higher art sales. The improved results and the announcement of a truce reached between Sotheby’s and Daniel Loeb’s hedge-fund Third Point LLC mark a turning point for the auction house, with investors now hoping for good tidings for the second quarter and the full year.
Sotheby’s First Quarter Earnings Report
Sotheby’s reported a $211 million (40%) increase in first quarter 2014 net auction sales, which resulted in a $26.1 million (33%) increase in auction commission revenues. Sotheby’s gaveled in $4.1 million as operating income for the first quarter, as compared to a loss of $21.3 million for the previous period.
Sotheby’s net loss for the first quarter of 2014 was $6.1 million, or $0.09 per share. This is $16.2 million less as compared to the $22.3 million, or $0.33 per share loss reported for the same period last year.
Statement by Sotheby’s CEO Bill Ruprecht
Bill Ruprecht, Sotheby’s chairman, president and chief executive officer, said that, “These outstanding first quarter 2014 results pick up where we ended 2013, when we were the fastest growing global auction company. They demonstrate that the art market remains robust, clients from all corners of the world aspire to engage and transact with Sotheby’s because they are benefitting from our unrivalled expertise and market knowledge, and we are executing well on our promise of cost control in 2014.”
Sotheby’s Declares Truce With Daniel Loeb
The financial results may be a cause for satisfaction among investors, but what made them giddily happy was the truce finally declared between activist investor Daniel Loeb and Sotheby’s. The auction house agreed to bring on board directors from Loeb’s hedge fund Third Point LLC. Loeb, Harry Wilson and Olivier Reza are now on the Sotheby’s board, but say they want to work with Bill Ruprecht and do not intend to seek leadership changes.
