Sotheby’s sold $3.45 billion of art during the first half of 2018, with $57.3 million net income in the second quarter of 2018—a decrease of $19.6 million, or about 26 percent, in comparison to the same period in 2017.
Two artworks that were sold with guaranteed prices for the consignors seem to have hit Sotheby's bottom line—indicating that the auction house charged a very low commission rate in order to secure the high-profile paintings.
In the earnings call on Monday, Sotheby's CEO Tad Smith said "if we had had more bidding it would have been robustly attractive" with the outcome for one of the unnamed paintings, while the other artwork experienced "a pricing error."
Sotheby's stock price is under pressure — shedding more than 5 percent in trading Monday — after the company's earnings showed a decline in margins. Much of the margin decline was due to two paintings that appeared to sell for massive prices, but actually lost or made very little money for the auction house. Sotheby's won't say which paintings caused the hit, but art industry sources say the first was an Amedeo Modigliani that sold in New York for $157.2 million and the other was a Pablo Picasso that sold in London for $36 million.