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TheStreet Open House

Why Sotheby's (BID) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Sotheby's  (BID) are down -9.76% to $36.72 after the auction house said second quarter profit slid 15%, with results falling short of market expectations as higher expenses and special charges offset a gain in revenue, the Wall Street Journal reports.

Sotheby's reported a profit of $77.6 million, or $1.11 per share, compared with a year-earlier profit of $91.7 million, or $1.33 per share. The quarter's results were hurt in part by after-tax special charges of $10.2 million. Total expenses rose 20% to $205.4 million.

Excluding special items, earnings were $1.26 per share, down from $1.33 a share per year earlier. Revenue gained 10% to $335.8 million. Analysts polled by Thomson Reuters expected a profit of $1.43 per share and revenue of $346 million.

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Net auction sales increased 19% during the quarter, contributing to a 13% rise in auction commission revenue, while agency revenue increased 7.2%.

Auction commission margin decreased to 15.2%, from 15.9% from a year earlier.

TheStreet Ratings team rates SOTHEBY'S as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SOTHEBY'S (BID) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."

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