In auto racing, drivers try to hit their apexes, meaning they try to drive their cars with such precision that they can hit the exact spot -- within inches -- on the racetrack each lap.
By consistently hitting their apexes, drivers are able to achieve their fastest possible lap times, and being able to turn the fastest lap times puts the driver in the best position to win.
Today, the premier racing company in the country, International Speedway Corp. (NASDAQ: ISCA), hit its Q2 earnings apex.
On the surface, the news didn't look good. The company posted a $31.7 million loss for the second quarter. But it was not just falling revenue that affected International Speedway, which is to be expected from an entertainment company in a soft economy.
It was also a string of one-time charges that affected ISCA's bottom line. Excluding one-time items, the company earned 35 cents per share.
More importantly, the company's Q2 earnings were spot on when compared to Wall Street's consensus estimates, which according to Thomson Reuters predicted a profit of 35 cents per share. So, you might say that International Speedway hit the apex dead-on when it comes to meeting the Street's expectations.
The solid earnings were welcome news for those of us addicted to all forms of motor racing. As a part-time racecar driver who has competed on many of the tracks owned and operated by International Speedway, I am personally happy that the recession hasn't managed to stall the company's bottom line.
To be certain, it's been a bumpy ride for ISCA and its shares over the past 12 months, with ISCA down nearly 35% over said period. Yet since hitting a low in March of just over $16 per share, the shares now are trading around $25.50.
In a statement accompanying today's earnings release, International Speedway CEO Lesa France Kennedy said that although advance ticket sales to the company's major motor sports events remain depressed, she was pleased with the company's results.
Ms. France also remarked that while she expects the consumer spending and corporate spending climate to remain under pressure throughout the year, she reaffirmed the company's fiscal-year outlook for 2009 revenue between $700 million and $720 million, and adjusted earnings between $1.80 per share and $2 per share.
Knowing first hand how well ISCA operates its facilities, and given the immense fan base of its NASCAR and Grand-Am Rolex Sports Car series, I'm confident the company will survive the recessionary traffic jam.
What this means is that climbing into the driver's seat on ISCA shares might just help your portfolio take the checkered flag.
Jim Woods is a Senior Editor for OptionsZone.com.
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