Sotheby's, the only publicly traded auction house, announced its best first half in history this afternoon. The company has had a record total of $3.4 billion in consolidated sales for the six months ending June 30, which includes both auction proceeds and private sales. Net income increased $127.2 million and $129.7 million respectively for the three- and six-month periods ended June 30.
On the call this afternoon to discuss second quarter and first half earnings, Sotheby's president and CEO Bill Ruprecht attributed the great results to tremendous growth in private sales, increased demand from the Chinese market, and exceptional tallies at their recent London auctions.The London contemporary evening sale on June 29 brought in over $174 million in one evening.
While there was an increase in revenues over the first half of 2010, there was also a rise in expenses for the company. A major uptick in these expenses came from accrued hiring costs and increased compensation, according to Ruprecht. There has been a surge of salary outlays, especially in Asia where the company is experiencing large amounts of growth. The balance sheet was also hit by unfavorable exchange rates, which cost the company millions of dollars. Sotheby's is based in New York, but has offices all over the globe, particularly throughout the Euro zone and in Asia.
Ruprecht noted that Sotheby's has invested a large amount of capital in China, but the rate of growth of the art market in Asia makes it a sound investment. In the words of Ruprecht, there are now a solid "three legs to the stool" of the market: the U.S., Europe, and China.
Ruprecht did not mention the lockout of their art handlers in New York during the call, nor how it might affect their business in the third quarter.