Will International Speedway Earnings Race Higher?

International Speedway (ISCA) will release its quarterly report on Thursday, and investors aren't sure whether to expect a profit or a loss from the racetrack operator. Yet even though its stock remains well below all-time record highs, the company has recovered substantially from its financial-crisis lows and a positive surprise from International Speedway earnings could produce even more substantial gains.

International Speedway owns 13 different motorsports entertainment venues, including the legendary Daytona Motor Speedway and its namesake Daytona 500 that starts of each NASCAR season and acts as the Super Bowl of the sport. Yet even with the big increase in the popularity of auto racing, the racetrack business still has plenty of challenges for owners and their shareholders alike. Let's take an early look at what's been happening with International Speedway over the past quarter and what we're likely to see in its report.

Stats on International Speedway

Source: Yahoo! Finance.

Where will International Speedway earnings finish the quarter?
Analysts have been guardedly optimistic in recent months about International Speedway earnings, keeping their August-quarter estimates unchanged but boosting their full-year fiscal 2013 projections by about 3%. The stock has performed reasonably, with a 6% jump since late June.

Most of those gains came in the wake of International Speedway's May-quarter earnings report. Although the company reported a drop in revenue of around 1%, earnings rose 64%, and even after accounting for onetime items that boosted the net income figure, International Speedway still managed to outpace investors' expectations. It also kept its guidance stable for the year.

What's troubling for International Speedway and its peers, though, is that an economic recovery hasn't really brought fans back to their tracks. Neither Dover Motorsports nor Speedway Motorsports (TRK) has been able to restore the revenue from general admission sales that it enjoyed during rosier times. Instead, both have turned to things like luxury spots for recreational vehicles and non-racing events like music festivals in order to add to sales.

In the long run, television broadcast rights could prove to be the make-or-break issue for International Speedway and other track owners. Comcast's (CMCSA -1.91%) NBC network agreed to pay $4.4 billion for a 10-year deal beginning in 2015 involving the final 20 races, with Fox retaining the Daytona 500 and 12 other Sprint Cup races. Yet reports speculated that NBC didn't face competition from Disney's (DIS -0.87%) ESPN, the current NASCAR broadcaster, because declining ratings led Disney to lose interest in holding onto the franchise.

In the International Speedway earnings report, watch to see whether an exciting Sprint Cup Chase season leads to more enthusiasm about the stock. A renaissance in NASCAR could start lifting International Speedway's shares back toward their previous peaks once again.

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