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Sotheby's Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2012 04:33PM

Sotheby's (BID) filed Quarterly Report for the period ended 2012-06-30. Sothebys has a market cap of $2 billion; its shares were traded at around $30.83 with a P/E ratio of 12.2 and P/S ratio of 2.4. The dividend yield of Sothebys stocks is 1.1%. Sothebys had an annual average earning growth of 24.4% over the past 10 years.



Highlight of Business Operations:

For the three and six months ended June 30, 2012, auction and related revenues decreased $63.4 million (18%) and $76.4 million (16%), respectively, almost entirely due to a lower level of auction commissions. The comparison to the prior year is also unfavorably impacted by changes in foreign currency exchange rates, which contributed approximately $7.1 million and $8.1 million, respectively, to the overall decrease. See below for a more detailed discussion of these and the other significant factors contributing to the decrease in auction and related revenues in the current periods.

For the three and six months ended June 30, 2012, auction commission revenues decreased $59.4 million (19%) and $80.4 million (19%), respectively, due to a decrease in Net Auction Sales as well as a decline in Auction Commission Margin. The comparison to the prior periods is also unfavorably impacted by changes in foreign currency exchange rates, which contributed approximately $6.4 million and $7.3 million, respectively, to the decreases versus the prior second quarter and year-to-date periods. See "Net Auction Sales” and “Auction Commission Margin” below for a more detailed discussion of these key performance indicators.

Net Auction Sales—For the three and six months ended June 30, 2012, Net Auction Sales decreased $246.7 million (13%) and $418.6 million (17%), respectively, due to a number of significant single-owner sales occurring in the prior periods, as well as a decrease in recurring various-owner sales volume. Net Auction Sales are also unfavorably impacted by changes in foreign currency exchange rates, which contributed $35 million and $40.4 million, respectively, to the overall decreases versus the prior second quarter and year-to-date periods. More specifically, the net decreases in Net Auction Sales are attributable to the following factors:

Excluding collections of Impressionist Art and Contemporary Art, worldwide sales of single-owner collections decreased $243.1 million (65%) and $279.2 million (65%), respectively, during the second quarter and year-to-date periods. The second quarter of 2011 included an unprecedented level of single-owner collections, including The Meiyingtang Collection of Chinese Porcelain ($76.5 million), The Mei Yun Tang Collection of Paintings by Chang Dai-chien ($76.5 million), The Evill/Frost Collection of 20th Century British Art ($59.8 million) and The Ullens Collection of Contemporary Chinese Art ($46.5 million).

Excluding Impressionist Art and Contemporary Art, recurring various-owner sales decreased $142.7 million (19%) and $162 million (17%), respectively, during the second quarter and year-to-date periods primarily due to decreases of $109.9 million (43%) and $101.1 million (32%), respectively, in worldwide sales of Asian Art.

Read the The complete Report



Stocks Discussed: BID,
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