Sotheby's (BID) Misses on 2Q Earnings and Revenue, Announces Share Buyback

Shares of Sotheby's (BID) were trading down -1.73 or -4.27 percent to $38.78 per share in Friday's premarket after the company reported earnings for the company's 2015 second quarter early this morning. The company reported lower than expected earnings and revenue for the quarter. Sotheby's stock closed at $40.51 per share, down -1.44 or -3.43 percent in Thursday's regular trading session.

Founded in London in 1744, New York City based Sotheby's is a multinational corporation and one of the world's largest auctioneers, specializing in the brokering of fine art, jewelry, real estate and collectibles.
Sotheby's holds auctions in nine different locations, with showrooms in London, New York, Paris and Hong Kong. Through the company's BidNow program, investors and collectors can view auctions live on the Internet and place bids in real time from around the world. In addition, Sotheby's Financial Services offers collectors and investors the world's only full service financing company specializing in art. Sotheby's operates through a global network of 90 offices in 40 countries.

For the company's second quarter, Sotheby's reported net income of $67.6 million or $0.96 per share compared to net income of $77.6 million or $1.11 per share in the same period one year ago. On an adjusted basis, net income came to $73.1 million with adjusted diluted earnings per share of $1.04 versus $87.8 million or $1.26 in the second quarter of 2014. Revenue for the quarter was $332 million, down one percent from last year.

For the first half of the year, Sotheby's adjusted net income was $80.5 million or $1.15 per adjusted diluted share compared to $84.9 million or $1.20 per share one year ago. Revenue for the first half came to $487.7 million. Analysts were expecting the company to report earnings per share of $1.24 on revenue of $340 million for the second quarter.

President and Chief Executive Officer Tad Smith stated in the company's press release that, "Our Company delivered strong sales to date in 2015 but some anomalies in the second quarter depressed the bottom line. We are moving forward with our strategic plan and look forward to reporting its results in due course."

Sotheby's reported adjusted operating income of $125.5 million in the quarter, down -$23.5 million or 16 percent. For the first half operating income came to $147.7, down -$11.1 million or -7 percent. According to the company, the decline was in part due to a loss incurred on a painting acquired earlier this year which was auctioned in the second quarter, and a calendar shift of the summer evening sale of Contemporary Art in London.

Sotheby's shares are already selling off in the premarket, down almost five percent so far. The stock will open under $39 per share, a level not seen since October of last year. Nevertheless, the company announced it would double its share repurchase program to $250 million indicating it would be purchasing $125 million in the near term. In addition, Sotheby's declared a $0.10 per share quarterly dividend payable September 15th to shareholders of record August 28th.

Other News About BID

Sotheby's COO leaving at end of August

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Sotheby's Continues Streak in London's Auction

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Published on Aug 7, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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