Sotheby’s Stock Heads South

Sotheby’s Impressionist/modern auction Tuesday night would have been considered a great sale…if it hadn’t been trounced the next night by Christie’s. That, coupled with yesterday’s report of its third-quarter results, appears to have sent the auction company’s publicly traded stock into a nosedive, as of the start of trading this morning.
Analysts who had dialed into Sotheby’s conference call in August congratulated Sotheby’s on its “great second quarter.” No such salutations greeted president and CEO William Ruprecht during yesterday’s conference call. He assured his interlocutors that the 10-cent quarterly dividend to be paid on Dec. 15 “is a reflection of our confidence and belief in the future of the business.”
Sotheby’s declared a third-quarter loss from continuing operations of $30.4 million, or 49 cents per diluted share, compared to a 2005 loss for the same quarter of $21.96 million. During the conference call, Ruprecht noted that the third quarter “has pretty much always been a loss period.” In the news release announcing the results, he said:
As the 73% increase in our fourth quarter Impressionist and Modern results and the 39% increase in our year to date sales make clear, the art market is extremely vibrant and we certainly expect a strong market and sales for the remainder of the year.