This look at Sotheby's earnings for the first half of 2018 is available to AMMpro subscribers. Monthly subscriptions begin with the first month free. Feel free to subscribe and cancel before you are billed. 

Sotheby's earnings call and financial filings this morning offered their usual periodic window into the company's inner workings, priorities, successes and weaknesses. The headline from the call which had an impact on Sotheby's stock (BID) knocking 10% off the price as trading opened before recovering to around the $50-level for the rest of the day.

The stock was impacted by the news that although sales were up (22%) for the first half of 2018 over 2017's total, income was down (26%.) More to the point, Sotheby's commission margins, which had been improving steadily over the last three years, dropped from 16.7% last year to 15% this year. Sotheby's was upfront that the fall in commissions could be attributed to two works sold in the first semester of 2018.

It didn't take much to surmise that the two works mentioned were the Modigliani sold in New York and the Picasso Marie-Thérèse sold in London. On the call, CEO Tad Smith was quick to point out that one of the works made the company money even if it had an out-sized influence the commission margin while the other was simply mis-priced. (That's a polite way of saying the company made a mistake.)

This is startling level of transparency from an auction house about their guarantee book. Those who pay attention to the auction houses might be asking themselves why.