International Speedway Corp. is one of the latest NASCAR companies to feel the economy’s wrath, as it reported that its first net quarter income fell 31% on falling revenue due to price cuts. Net income fell to $25.1 million from $36.2 million, a year earlier. Revenue fell from $193.9 million to $166.1 million, a 14% drop.
As NASCAR fans’ average income is below the national median, which makes the more susceptible to the recession. As a result, attendance at NASCAR events is down.
Corporations have also been cutting their hospitality spending, which is pushing ISC’s revenue down.
In light of these results, ISC has cut its fiscal-year earnings outlook. Originally, the company forcasted $745 million to $765 million in revenue. It is now forecasting $700 million to $720 million in revenue.
The company has reduced ticket prices to make the event more affordable for fans.
News of the fall in income sent the company’s stock down 24%.
In a note to his clients, Erik Kolb, of Standard & Poor’s wrote:
Despite the company’s plans for reducing ticket prices and implementing broad cost reductions, we see continued declines ahead.
He changed the stock’s rating to “sell.”