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Sotheby's Q3 Loss Narrows - Update

Auction house Sotheby's (BID), Monday reported a loss for the third-quarter that narrowed from a year ago, as auction revenues increased. Both earnings and revenues for the quarter trumped Wall Street estimates.

New York-based Sotheby's third-quarter loss narrowed to $30.1 million or $0.44 per share from $32.6 million or $0.48 per share last year. Analysts polled by Thomson Reuters estimated a loss of $0.47 per share for the quarter. Analysts' estimates typically exclude special items.

Sotheby's, which auctions fine arts and other valuable collectibles, usually posts a small loss or profit in the first and third quarters of fiscal year, due to the seasonal nature of the art auction market. The majority of auctions are typically held in the second and fourth quarters.

Auction and related revenues for the quarter rose to $76.9 million from $59.7 million a year ago. Total revenues rose to $107.9 million from $68.5 million a year ago. Analysts expected revenues of $70.26 million for the quarter.

Sales growth for the third quarter were driven by a 77 percent increase in private sale commissions and 16 percent increase in auction commission revenues.

Commenting on the results, Chief Executive Bill Ruprecht said, "Our third quarter results have improved since a year ago, with sizable revenue growth. Private sales, which continues to be an area of focus for Sotheby's, contributed more than a third of auction and related revenues in the third quarter - a significant shift from just a short time ago."

Total expenses for the third quarter rose to $142 million from $106 million a year ago.

Looking ahead, Ruprecht said, "We're very pleased to say the fourth quarter is off to a remarkable start. Our Hong Kong sales series brought a record $538 million last month, a 105% increase over the previous year and a clear validation of our strategic investments in this region of the world. Last week, our Impressionist and Modern Art sales in New York achieved $348 million, up 71% and the second-highest series total in this category in the Company's history."

BID closed Monday's regular trade at $51.04, down $0.37 or 0.72%, on the NYSE. The stock, however, gained $1.17 or 2.29%, in after-hours trade.

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