Post Earnings Coverage as Sotheby’s Quarterly Revenue Surged 76%, Adjusted EPS Improved 36%

Upcoming AWS Coverage on KAR Auction Services Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 30, 2017 / Active Wall St. announces its post-earnings coverage on Sotheby’s (NYSE: BID). The Company released its first quarter fiscal 2017 financial results on May 10, 2017. The auctioneer of authenticated fine art, decorative art, jewelry, wine, and collectibles reported better than expected revenue and earnings results. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Sotheby’s’ competitors within the Specialty Retail, Other space, KAR Auction Services, Inc. (NYSE: KAR), reported on May 09, 2017, its Q1 financial results for the period ended March 31, 2017. AWS will be initiating a research report on KAR Auction Services in the coming days.

Today, AWS is promoting its earnings coverage on BID; touching on KAR. Get our free coverage by signing up to http://www.activewallst.com/register/.

Earnings Reviewed

For the three months ended March 31, 2017, Sotheby’s reported revenue of $187.54 million compared to revenue of $106.53 million in Q1 2016. The Company’s revenue numbers surpassed analysts’ consensus of $111.0 million. Sotheby’s stated that the worldwide art auction market has two principal selling seasons, which occur in the second and fourth quarters of the year, where net auction sales have historically represented approximately 80% of total net auction sales for the year. Accordingly, Sotheby’s financial results are seasonal, with peak revenues and operating income occurring in those quarters.

For the reported quarter, Sotheby’s Agency commissions and fees increased to $99.49 million compared to $81.07 million in Q1 2016. The Company’s inventory sales surged to $71.38 million in Q1 2017 compared to $6.79 million in the prior year’s same quarter. Sotheby’s private sales were up 41% for the quarter.

During Q1 2017, Sotheby’s net auction sales, which were reported down 3% on a dollar basis, were up 7% on a constant currency basis, given the concentration of sterling-denominated sales in London during the reported quarter and the adverse change in the sterling to dollar exchange rates versus the year ago same period. The Company’s agency commissions and fees were up 23% on a y-o-y basis. The growth was attributable to an improvement in the Company’s auction commission margin from 15.4% last year to 18% in Q1 2016, while the Company’s guarantees generated much better financial performance than the guarantees associated with last year’s first quarter sales and higher private sales.

For Q1 2017, Sotheby’s reported a net loss of ($11.3) million, or ($0.21) per diluted share, representing a $14.6 million (56%), or $0.20 per diluted share (49%) improvement on a y-o-y basis. After excluding certain charges in the prior year’s same period, the Company’s adjusted net loss improved 46% from adjusted net loss of ($21) million in Q1 2016 to ($11.4) million in Q1 2017 , while adjusted diluted loss per share improved 36% to ($0.21) in the reported quarter from ($0.33) in the prior year’s same quarter. The Company’s adjusted loss numbers were better than Wall Street’s expectations for adjusted loss of $0.38 per share.

Balance Sheet

The Company reported that its estimated Sotheby’s cash balance, which it defines as cash on the balance sheet less amounts it has collected that is due to consignors, was approximately $25 million higher on a y-o-y basis, in spite of Sotheby’s having returned approximately $200 million to its shareholders in the form of stock buybacks during the period. Sotheby’s also noted that it has approximately $300 million in cash that is still being held abroad, but awaiting potential repatriation, and for which of the tax liability associated with this cash has already been provided for, but remains unpaid. During the reported quarter, Sotheby’s purchased 740,000 shares of stock for nearly $34 million specifically to offset the dilution from recent grants under its long-term incentive plan.

Stock Performance

On Friday, May 26, 2017, the stock closed the trading session at $53.03, slightly climbing 0.02% from its previous closing price of $53.02. A total volume of 329.81 thousand shares have exchanged hands. Sotheby’s stock price skyrocketed 14.31% in the last three months, 34.02% in the past six months, and 77.65% in the previous twelve months. Furthermore, on a year to date basis, the stock soared 33.04%. Shares of the company have a PE ratio of 34.44 and currently have a market cap of $2.79 billion.

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