Financial fallout.(Championship Auto Racing Teams revenues fall)(Statistical Data Included)(Brief Article)

It's no surprise that, after another disappointing financial report July 31, Wall Street was mostly doom and gloom regarding the earning potential of Championship Auto Racing Teams. Many brokerage houses downgraded CART stock.

CART's revenue and earnings both fell for the second consecutive quarter, with net income dropping 36 percent to $3.9 million. Further, chief financial officer Thomas Carter predicted a 37 percent decrease in CART's sponsorship revenue for the season, thanks largely to the bankruptcy of former marketing partner ISL.

Most market analysts responded with pessimistic research briefs, though there were a few dissenters. Citing basically the same concerns as other firms, Bear Stearns nonetheless recommended ``buy'' if CART shares drop to $15. CART shares dropped to $13.55, a 52-week low, on July 31.

The concerns? With its second-quarter report, CART reduced its projected 2001 earnings about 25 cents a share to 76 cents, and 2002 looks even more dubious. Auerbach, Pollack and Richardson maintained its ``hold'' rating, but warned ``a large number of uncertainties could push the stock lower.

``Given the ongoing uncertainty over a multitude of events-TV rights fees, sponsorships, race dates for next year, resolution of lawsuits-we would anticipate further price weakness,'' said analyst Dennis McAlpine. ``We would not buy the stock until those key parameters can be determined.''

What about the teams?

Wall Street brokerage houses might be looking out for stockholders, but CART's teams are left to fend for themselves. This is the time of year when teams are negotiating sponsorship and driver deals for next season, when marketing people at many companies are preparing 2002 budget requests for their boards.