Both Sotheby’s and Christie’s managed to eke out small increases in the total sales (including both auction and private sales) for the first half of 2008 over that of 2007, and both (as was also true last year) were neck-and-neck. As a public company, Sotheby’s (unlike Christie’s) reports not only sale totals but also revenues, net income and earnings per share. Those figures, despite Sotheby’s efforts at cost management and risk reduction, were not as impressive.
Sotheby’s reported total sales for the first six months of this year of $3.44 billion (up from last year’s $3.24 billion); Christie’s reported $3.5 billion (up from $3.25 billion). But Sotheby’s fudged its figure a little bit: It included its contemporary art sales, occurring in London on July 1 and 2, which fell just outside this year’s first half (but HAD been in the first half last year). Christie’s London contemporary sales this year occurred on June 30 (the high-priced evening sale) and July 1 (the more modest day sale).
In a conference call yesterday with stock analysts, Sotheby’s president and CEO Bill Ruprecht repeatedly reminded participants that the 8% decline in Sotheby’s revenues and 37% decline in net income from the first half of 2007 were largely due to this year’s calendar shift of the London contemporary sales to the third quarter. Diluted earnings per share were down from $2.02 to $1.29.
He made the best of things by observing (in the press release, issued before the conference call):
These results are the second best in our history, and are remarkable in the context of today’s global economic environment.
During the conference call, Ruprecht said that the auction house’s experience with guarantees (amounts promised to consignors, even if bids fall short) was profitable in the first half, despite a $10 million loss on one collection. When asked if the auction house was considering a buy-back of shares (which have never recovered from their huge decline last fall), Sotheby’s chief financial officer, Bill Sheridan, remarked:
It’s a very topical discussion and something we will be looking at in the third and fourth quarter.