Sothebys (NYSE:BID), the seller of fine arts, posted better-than-expected third quarter results on Tuesday as activist investors continue to press the company for reforms. The New York-based company posted a net loss of $30.1 million or 44 cents a share, compared to $32.6 million or 48 cents in the same period last year. Analysts polled by Bloomberg were expecting a loss of 47 cents per share. Founded in 1744, Sothebys is the oldest company on the New York stock exchange.

Sothebys

Sothebys had expected Q3 loss

Sothebys (NYSE:BID) said the third quarter loss was expected as it’s a dull period for the art auction market. The third quarter typically accounts for only 7%-10% of its annual revenues. Anyway, revenues surged 58% to $107.9 million. Solid revenues were driven by a 77% jump in private sales commissions and 16% increase in auction revenues. The company said that it is actively reviewing its financial policies and capital allocation strategies. But increasing staff salary in Asia, plus cost increases and hefty investment in its website, diminished the sales growth.

Hedge fund manager Dan Loeb owns a 9.3% stake in the company. Mr. Loeb demanded the ouster of Sothebys (NYSE:BID) CEO Bill Ruprecht in October, saying that the company desperately needs renovation. But Sothebys called Dan Loeb’s demands baseless and incendiary. Another activist investor, Richard McGuire of Marcato Capital Management, is pressing the company to sell its properties in New York and London and distribute $1.3 billion to shareholders. Mr. McGuire owns a 6.7% stake in the company. Sothebys has been planning to sell its Manhattan headquarters that it purchased for $370 million in 2009.

Sothebys fall auctions in full swing

Sothebys (NYSE:BID) popular fall auctions are hot in trade circles. The company expects to raise over $500 million at its contemporary art sale on Wednesday in New York. Sotheby recently fetched $538 million from its Hong Kong auction.

Wedbush Equity Research analysts Rommel Dionisio and Kurt Frederick said that auctions in the fourth quarter are off to a strong start. The $538 million from Hong Kong auction shows that art demand is rising in Asia. The Impressionist & Modern Art sales last week collected $348 million, an increase of 71% from the previous year. Wedbush expects Sothebys (NYSE:BID) fourth quarter sales to come at $319 million with $1.46 in earnings.

Wedbush has an Outperform rating on the stock with $58 price target. The analysts said that rising global wealth, especially in the Middle East and Asia, will boost demand in the art auction market.

Sothebys (NYSE:BID) shares were down 2.04% to $50 in early trading session.