After the market close Nov. 9, fine-art and collectible auctioneer Sotheby's (NYSE:BID) released fiscal third-quarter 2006 earnings for the period ended Sept. 30. Here are the quick and dirty details for the quarter.

  • Sales grew 1.6% to $57.4 million in what is a seasonally slow quarter for Sotheby's. The company estimates that its third quarter accounts for only 7% to 10% of total annual sales.
  • Net income came in at minus $30.7 million, while earnings per share remained negative at $0.49; this was worse than the $0.33 loss analysts were expecting for the quarter. Management attributed the higher-than-expected loss to increased salary and administrative costs, but noted that the third quarter usually results in a bottom-line loss.
  • Cash flow trends were also negative; investors will have to look to fourth-quarter and year-end results to discern 2006 trends at Sotheby's.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$57,090

$57,380

$56,469

1.6%

Net Profit

--

($30,727)

($20,961)

N/A

EPS

($0.33)

($0.49)

($0.35)

N/A

Diluted Shares

--

61,780

61,135

1.1%

13 weeks ended Sept. 30, 2006 and 2005.

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

81.94%

85.59%

(3.65)

Operating Margin

(66.61%)

(39.17%)

(27.44)

Net Margin

(53.55%)

(37.12%)

(16.43)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$43,918

$132,635

(66.9%)

Accounts Rec.

$194,307

$354,741

(45.2%)

Inventory

$115,426

$45,087

156.0%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$117,480

$131,354

(10.6%)

Long-Term Debt

$99,768

$99,701

0.1%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

($77,854)

($133,791)

$55,937

Capital Expenditures

$8,317

$6,555

$1,762

Free Cash Flow

($86,171)

($140,346)

$54,175

39 weeks ended Sept. 30, 2006 and 2005.

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Related Companies:

  • Collectors Universe (NASDAQ:CLCT)
  • Ritchie Bros. Auctioneers (NYSE:RBA)
  • eBay (NASDAQ:EBAY)

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