“Aggregate auction sales to date of $3.4 billion are up 14%…we expect a stronger third quarter than last year.”
–CEO Bill Ruprecht says.
· Contemporary Art up at $1,021.7 million, best ever · Impressionist and Modern Art up at $816.2 million, best ever. · Sotheby’s sold 503 $1 million lots (391 in 2007) · Sotheby’s sold 90 $5 million lots (57 in 2007) · Sotheby’s sold 34 $10 million lots (20 in 2007) · Sotheby’s sold 10 $20 million lots (9 in 2007). Notes from the earnings call after the jump.
On the conference call, Ruprecht reaffirmed his caution about guarantees. “This is a time of signficant uncertainty,” he said in response to an analyst’s question of whether he would be more aggressive with guarantees given his bullish expectations for Q3. Ruprecht gave himself some wiggle room if the company saw works they felt strongly about guaranteeing but then quickly re-affirmed his self-imposed $350-million company-wide cap on guarantees as a way to manage risk. In the previous quarter, profits had suffered because of the pullback on guarantees.
The CFO made a specific point of refuting Robert Frank of the WSJ’s claims that Sotheby’s was having problems with their receivables. As of the end of the 2nd quarter, he said the 2007 receivables were “all in” and no reserve would be used.
Ruprecht responded to a question about the shifting geographic composition of buyers by saying that the US remains the largest buyer of art in the world but for the last three years, the US has been a net exporter of art. If that sounds like a brain-teaser to you, we would translate it to read like this. The US is still the largest market for art. The commodity-based buyers are not located in any one region enough for the flow of art from the US to those countries to displace the US as the largest buyer of art. That means the global story that has been so much a part of the art market’s success in recent years is still in place.
Here is the Wall Street Journal’s coverage of the earnings report. And Forbes Magazine‘s, too. The Wall Street Journal previously looked at Christie’s sales for the first half of the year here. We’ll have a report on the auction market later in the month.