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The auction house Sotheby’s (NYSE:BID) released its fourth quarter earnings report today and its full year financial reports ended December 31 2016.

The company’s CEO, Tad Smith, remarked how their fourth quarter results for the 2016 fiscal year “came in better than expected” as its fourth quarter sales remained firm.

“These results reflect growing confidence in the market as collectors responded enthusiastically to the great collections and works we secured for sale. Even more importantly, the quarter demonstrated that when the market stabilizes, let alone when it returns to its secular growth trajectory, our company is poised to capitalize on the upturn and do very well for our shareholders,” Smith added.

Sotheby’s reported gross profit of $74.1 million, or diluted earnings per share of $1.27, is a 69 percent jump from the previous year’s report of $43.7 million, or $0.63 per diluted share. The gap in figures is mainly owing to a non-cash income tax settlement in 2015 that was worth $65.7 million regarding a deliberate repatriation of foreign earnings. The company’s adjusted net income for 2016 is $99.6 million and adjusted diluted earnings per share of $1.71.

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The financial results were significantly affected by a several factors:

 Reported consolidated sales dipped 27 percent to $4.9 billion in 2016, principally due to the art market’s decline in the first six months of 2016.

In part, the said factors were offset by an improvement in the Auction Commission Margin to 17.1 percenet in 2016 from its level in 2015 at 14.3 percent. Also contributing to the offset is the level of variable expense was lowered. The company also benefited from a lower effective tax rate and a significantly lower number of shares outstanding due to share repurchases made throughout 2016.

For the fourth quarter of 2016, net income is $65.5 million, or $1.20 per diluted share, as compared to a net loss of ($11.2) million and diluted loss per share of ($0.17) in the period before it. These improvements are primarily due to the aforementioned non-cash income tax and voluntary separation incentive program charges. When compared the prior year, fourth quarter 2016 adjusted net income decreased 8 percent to $73.8 million, but adjusted diluted earnings per share increased 13 percent to $1.35, reflecting the reduced share count resulting from share repurchase program.

The company also expressed their plan to start managing live artists, which is usually handled by galleries and is not commonly ventured on by auction houses.

Sotheby shares currently trade at $44.17 and have been up $2.65 over the previous three months.

Also, the company intends to launch virtual reality paintings.

The auction house has become the first to hire designers to create a 360 degree experience, making the original paintings transform into a lived experience through Oculus Rift headsets.

Sotheby’s galleries installed the technology for its approaching surrealist sale, which is part of its digital strategy to entice new, tech-savvy buyers to appreciate its works.

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