Auction house Sotheby's shares tumble on lower second-quarter profit

 
Courtney Goldsmith
Follow Courtney
Contemporary Art Evening Auction At Sotheby's, London
Going, going, gone: Shareholders drop Sotheby's as profit falls (Source: Getty)

Investors in Soethby's were not sold on the autctioneer's second-quarter earnings today as its share price dropped more than seven per cent.

The firm's share price fell 7.73 per cent to $51.45 in afternoon trading on the New York Stock Exchange after it revealed net income for the three months to the end of June fell about 14 per cent to $76.9m compared with the previous year.

Soethby's said profit tumbled as a higher level of agency commissions and fees and a lower effective income tax rate were overshadowed by a higher level of indirect expenses.

Read more: A diamond ring bought for £10 at a boot sale in London to sell for £350,000

Earnings per share missed Wall Street's expectations of $1.48 per share, falling six per cent to $1.43 per share.

The auction house said revenue for the second quarter rose five per cent to $314.9m (£240m) due to increased inventory sales, but it was still slightly lower than analyst forecasts of $315.7m.

Chief executive Tad Smith painted a positive picture, however, saying the company was "absolutely delighted with the many things going on inside Sotheby's to position us strongly for the future".

Shares in the 273-year-old auction house had risen to $57.70, a record high, in July.

Read more: Sotheby's reports $54.5m loss in last quarter

Related articles