Speedway Motorsports shares drop on shortfall

Wednesday, May 9, 2001 | 10:19 a.m.

SUN STAFF AND WIRE REPORTS

CHARLOTTE, N.C. -- Shares of Speedway Motorsports Inc. skidded Tuesday and today after the company's first-quarter core earnings failed to impress Wall Street.

In late trading Tuesday, shares of Speedway Motorsports dropped $5.59 or 19.7 percent to $22.80 on the New York Stock Exchange. The shares fell another $1.30 this morning to $21.50.

Speedway Motorsports' said net income surged $3.4 million, or 124 percent, to $6.1 million, or 15 cents a diluted share. That was in line with the consensus estimate of analysts surveyed by Thomson Financial/First Call.

A year earlier the company posted per-share earnings of 6 cents. Both figures include the effects of an accounting change. Revenue rose 2 percent from a year earlier to $67 million.

However, analysts said Speedway Motorsports' per-share earnings were boosted by a couple of pennies from condominium sales included in the company's other income.

"Without that, they would have been a little below expectations," said J.P. Morgan analyst Dean Gianoukos. Otherwise, earnings were fine, he said. He attributed the selloff in shares, in part, to momentum investors exiting.

Legg Mason Wood Walker Inc. analyst Breck Wheeler said first-quarter revenue was about 8 percent below her estimate, and other income was higher than expected.

Speedway Motorsports shares set a 52-week high of $30.20 on April 25.

Dennis McAlpine, an analyst with Auerback, Pollack & Richardson, said investors were worried that lower attendance at Las Vegas Motor Speedway events indicates declining interest or overpriced tickets.

Speedway Chief Financial Officer Bill Brooks said quarterly revenue from admissions at all of the firm's tracks fell 4 percent from a year earlier -- reflecting weak ticket sales this quarter at Las Vegas Motor Speedway. Permanent seats were sold out, but the speedway didn't sell tickets for the 15,000 or so temporary seats added in 2000, he said.

"While our first quarter results met expectations, the NASCAR racing events at LVMS hosted less attendance than in the prior year. We remain concerned about the effects that challenging economic conditions may have on near-term ticket sales," Brooks said.

Speedway Motorsports, Concord, N.C., is a motorsports marketer and promoter. The company owns and operates six tracks and food, beverage and souvenir merchandising services.