In recent art world news, Sotheby’s posted a $23.5 million net loss during the traditionally slow third quarter, up 57 percent from last year, announced by the auction house in its quarterly earnings call last Friday. The “net loss of $0.45 per share beat expectations that foresaw a $0.67 per share drop, and the revenue total of $171 million was ahead of the anticipated figure of $110.9 million.”
The increase was attributed in part to the inclusion of Hong Kong fall sales in the financial period along with an atypical $7.4 million tax benefit. Sotheby’s had built a reserve to defend against a potential tax liability and has since reversed the reserve with the one-time liability now past the statute of limitations to challenge. In effect, this action gave the auction house a one-time cash infusion during this traditionally slow period in the summer months.
Sotheby’s executives were cautiously optimistic in addressing the quarter noting that “both sales in Asia and sales of contemporary art are up from a year ago—at this point last year, both sectors were trending down from the year prior.” The auction house acknowledged that the while it benefited from the change in timing of the Hong Kong sales in the third quarter, the fourth quarter will be “negatively affected” with the exclusion of the Hong Kong sales.
The third quarter is typically the slowest period of the year as it accounted for less than five percent of the auction house’s total sales last year. Sotheby’s total consolidated sales, which include auctions, private sales and inventory sales, are up 13 percent nine months into this year.