Sotheby's has quarterly loss, shares rise on outlook

By Melissa Fares

NEW YORK (Reuters) - Sotheby's (BID.N) on Monday reported a first-quarter loss compared with a year-ago profit, as the international art auction house's sales plunged 35 percent from record results a year earlier.

Sotheby's President and Chief Executive Officer Tad Smith said this year's first-quarter appeared to mark a return to more typical seasonal patterns for the auctions business after unusually strong results in the first three months of 2015. Sotheby's usually posts a loss in both the first and third quarters, and last year's first-quarter profit had been the first since 2011 and the largest to open a year since 2007.

Smith said, however, the second quarter has gotten off to a strong start after sales in Hong Kong in early April topped expectations, rising 17 percent on a same-sales basis to $405 million (281 million pounds).

Shares of Sotheby's rose 6 percent to $28.91, a five-month high, following the news and was the second-biggest percentage gainer on the day in the S&P 400 Midcap Index (.IDX). Since hitting a six-year low back in February, Sotheby's shares have risen more than 50 percent, broadly outperforming the midcap index, which is up 17 percent in the same period.

Sotheby's, which competes with privately held Christie's, posted a net loss of $25.9 million, or 41 cents per share, compared with a profit of $5.2 million or 7 cents per share, a year earlier.

Including costs associated with a voluntary staff buyout programme announced in late 2015, Sotheby's posted an adjusted loss of 35 cents per share. That was a wider loss than Wall Street's forecast of a loss of 23 cents per share, according to I/B/E/S.

Total revenue dropped more than 30 percent to $106.5 million from $155.7 million. Analysts had forecast revenue of $124.5 million.

"As we exited 2015, it was clear that the significant market growth experienced in 2014 and the first part of 2015 had slowed somewhat, and the impact can be felt in our results for the first quarter," Smith, who was appointed CEO in March of 2015, said in a statement.

(Reporting by Melissa Fares; Editing by Dan Burns)