Sotheby's Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auction house Sotheby's (NYSE: BID  ) had bidders flee as they fell 10% today after the company reported weaker-than-expected earnings.

So what: Revenue climbed 17% to $119.6 million, which was slightly above expectations, but the bottom line was hurt by increased operating expenses. Those costs brought earnings per share down to $0.03, a penny below expectations.

Now what: The slight earnings miss has been the focus today, but the first quarter is usually a loss quarter for the company, so it isn't all bad. The results were also negatively affected by inventory writedowns, which shouldn't hamper long-term results. I see this as a buying opportunity for this Motley Fool Hidden Gems pick based on growing revenue and improving profitability.

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