Ladies and gentlemen, International Speedway has started its engines. The top promoter behind the Nascar auto-racing circuit, International Speedway (symbol ISCA) is on a marketing tear. More than 37 million people tuned in last February to watch the sold-out Daytona 500 race on television, Nascar's highest TV ratings ever. Meanwhile, the Daytona Beach, Fla., company has been adding to its stable of big-name advertisers.
Marketers love Nascar, a sport that covers every inch of its athletes and their cars with ads. International Speedway operates 11 racetracks across the country. It generates revenue primarily through admissions, advertising, concessions, merchandising and sponsorship deals.
The company beat analyst expectations when it reported first-quarter results April 6. It generated net income of $44 million, or 83 cents a share, compared with $41 million, or 77 cents a cent, in the same quarter a year ago. Analysts had expected International Speedway to earn 81 cents a share, according to Thomson First Call. "Revenues were slightly higher than expected while operating expenses were $1.6 million below our estimates," says Raymond James analyst Joseph Hovorka, who rates the stock a "strong buy."
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There were other reasons for cheer. International Speedway struck long-term sponsorship agreements with Bank of America and Anheuser-Busch in the first quarter. Beauty-products maker Elizabeth Arden launched its Daytona 500 men's fragrance at the race. DirecTV and Pepsi bought naming rights to races at International Speedway tracks.
International Speedway's stock, currently $51, is off 30% from its 1999 high. It trades at 15 times the $3.28 per share that analysts expect the company to earn for the year ending November 31. Based on strong first-quarter performance, Hovorka has a 12-month target price of $63.
--Thomas M. Anderson
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