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Asia Society’s New Art Expert Paints His Vision

Sotheby’s office on the Upper East Side of Manhattan. COURTESY SOTHEBY’S''

In a quarterly earnings call this morning, Sotheby’s CEO Tad Smith announced that the auction house would report $89 million in net income for the second quarter of 2016, an increase over the same period of 2015 even amid a decrease in net auction sales.

The auction house posted a diluted earnings per share price of $1.52, compared to $0.96 a year ago.

Comparisons between the two years may not be fair: The net increase of $67.6 million during last year’s second quarter was hobbled by a variety of factors that could not have had a similar impact in 2016. For instance, the decision to hold last year’s contemporary evening sale in London during the third quarter dampened sales results, as did a variety of other occurrences: losses on a work that was resold at a low price, penalties from a years-old authentication claim, and high U.S. federal tax rates on foreign earnings due to the repatriation of such earnings for redeployment in the United States.

The shift of last year’s London sale from the second to third quarter also complicates a head-to-head comparison of differing auction results between the two years. While sales from 2016’s second quarter are down just 16 percent compared to last year’s period, when adjusting for the inclusion of the London sale, the difference is a 24 percent decline.

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