Sotheby’s on Wednesday reported record second quarter revenues of $339.5 million, a $91.2 million, or 37 percent, increase from the prior period, primarily due to a 43 percent increase in consolidated sales to $2.3 billion (including a 45 percent increase in private sales to $172.6 million).
Income from continuing operations for the second quarter of 2007, ended June 30, was an historic high of $107.3 million compared to $72.4 million for the prior period, a $35 million, or 48 percent improvement, the auction house said.
This growth for the period was partially offset by certain expense increases, which include the unfavorable impact of foreign currency translations of $5.7 million, Sotheby’s said. Salaries and related costs increased $14.8 million, or 21 percent, largely due to higher full-time salaries and higher equity compensation costs. General and administrative expenses increased $13.1 million, or 42 percent.
For the first six months of 2007, Sotheby’s reported that revenues reached a record high of $486.9 million, a $142.6 million, or 41 percent, improvement largely due to a 45 percent increase in consolidated sales to a record $3.24 billion.
Private sales also saw strong growth with a 43 percent increase to $334 million, surpassing our full year 2006 private sales total of $327.9 million, Sotheby’s said. Income from continuing operations for the first half of 2007 was a record $131.7 million, a $63.2 million, or 92 percent, increase from the first half of 2006. This growth is partially offset by the expense increases mentioned previously and the unfavorable impact of foreign currency translations (a $12.9 million impact versus the prior period).
The company’s results for the first half of 2007 were significantly impacted by a one-time benefit of $20 million related to an insurance recovery from the key man life insurance policy covering Robert Noortman, who died unexpectedly in January 2007 and a $4.8 million gain on the sale of our former Billingshurst salesroom property in the United Kingdom, partially offset by a $15 million impairment charge related to intangible assets and goodwill of Noortman Master Paintings, B.V., Sotheby’s said. Excluding these items, income from continuing operations for the first half of 2007 would have been $123.3 million, a $54.9 million, or 80 percent, improvement from the first half of 2006.
“These past six months have been historic by all standards” said Bill Ruprecht, Sotheby’s president and chief executive officer. “In this six month period we earned more than in any full year in our history. We believe that these results validate our strategy, demonstrate the significant operating leverage in our business model and highlight our ability to execute in a strong art market. They reaffirm our commitment to our clients, our employees and our shareholders. And, very importantly, they reaffirm our commitment to profitability.”