Sotheby’s announced its 3rd Quarter results which were expected to be down substantially from the previous year and, in that respect, did not disappoint. The calendar and 2016’s overall reduction in sales volume dropped gross sales by 26%. The company continues to take charges for the potential earn-out of its acquisition of Art Agency, Partners.
There some bright spots too, according to CFO Michael Goss:
These factors are somewhat mitigated by an increase in Auction Commission Margin from 15.3% to 16.5%, a reduced level of incentive and share-based compensation expense, a lower effective income tax rate, and diluted earnings per share benefited from a lower number of shares outstanding due to share repurchases made over the last twelve months.
The financials aside, there was bigger news. Sotheby’s has agreed to a board member to represent Taikang Insurance’s plurality stake. As part of the deal, Taikang has agreed not to buy more than 15% of the company’s stock (likely where it’s 13.5% stake will end up once the buy back has been completed.)
This gives Sotheby’s three years of breathing room while somewhat putting a floor under the company’s stock. Here’s the announcement about the board member and standstill agreement:Continue Reading