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Sotheby’s First-Quarter Loss Narrows as Sales of Art Increase

May 7 (Bloomberg) -- Sotheby’s, the auction house that ended a bitter proxy fight this week with activist investor Daniel Loeb by appointing him to its board, said losses in the first quarter narrowed from the year-earlier period.

The New York-based company said it lost $6.1 million, or 9 cents a share, compared with a loss of $22.3 million, or 33 cents a share in the year earlier period. Sotheby’s was expected to have a decline of 17 cents a share, according to the average of five analysts surveyed by Bloomberg.

Sotheby’s attributed the results to an increase in sales of Impressionist and contemporary art. Sotheby’s said its consolidated net sales increased 32 percent to $1 billion. The auction house typically posts a small loss or profit in the first and third quarters. The biggest sales are held in the second and fourth quarters. Its marquee Impressionist and modern art evening sale in New York is set for tonight and its contemporary-art sale is scheduled for May 14. Tonight’s sale has an estimated range of $264 million to $383 million.

The company reported revenue of $156.8 million, up from $101.7 million in the year-ago period.

Sotheby’s shares have declined 9.9 percent this year including reinvested dividends.

Proxy Fight

Sotheby’s Chief Executive Officer William Ruprecht, said in a statement that “these outstanding first quarter 2014 results pick up where we ended 2013, when we were the fastest growing global auction company. They demonstrate that the art market remains robust.”

On May 5, Sotheby’s agreed to appoint Third Point LLC hedge-fund firm founder Loeb and two of his candidates to its board of directors, ending a closely watched proxy fight between the auction house and its largest shareholder.

Sotheby’s and Third Point said in a joint statement that Loeb and his two nominees, Olivier Reza and Harry J. Wilson, joined the board. Sotheby’s annual shareholder meeting, set for yesterday, will be rescheduled for later this month.

The parties also agreed to cap Third Point’s stake in the company, currently at 9.6 percent, at 15 percent. The agreement was a win for the fund manager who for months had criticized Ruprecht and the company’s executive compensation plan, internal operations and “deteriorating” competitive position.

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