|28 Apr 2006 21:59:02|
|Callaway Golf profit rise beats estimates|
LOS ANGELES, April 26 (Reuters) - Callaway Golf Co. (ELY.N: Quote,
Profile, Research) on Wednesday said first-quarter net profit rose,
beating Wall Street expectations, as results were helped by lower
operating expenses and growing demand for its woods golf clubs.
The golf equipment maker, known for its Big Bertha line of clubs, said
quarterly net profit was $22.8 million, or 33 cents per share, compared
with $18.4 million, or 27 cents per share, in the year-ago period.
Results included 2 cents per share for stock-based compensation and 1
cent per share associated with the integration of the company's
Four analysts surveyed by Reuters Estimates expected, on average,
earnings of 33 cents, excluding items, on sales of $324.5 million.
Sales rose less than 1 percent to $302.4 million from $299.9 million in
the year-ago period.
"Achieving this level of sales was significant because product launches
in the first quarter of 2006 were timed later in the quarter as
compared with product launches last year," said Chief Executive George
Sales in the United States and Europe fell 2 percent and 4 percent,
respectively, while sales in Japan, a key golf market, rose 5 percent.
Woods were the biggest revenue driver, with 48 percent growth, compared
with a 20 percent decrease in irons and a 22 percent decrease in
Sales of golf balls fell 6 percent. Callaway has been consolidating its
golf ball manufacturing operations and integrating the Top-Flite golf
ball business into the company's operations.
Operating expenses in the quarter decreased 6 percent.
The company, which in past years has faced fierce competition from
lower-priced rivals and struggled with an inefficient supply chain and
high expenses, is in the midst of a restructuring geared toward saving
$70 million a year by 2007.
The company's shares closed at $15.83 on the New York Stock Exchange,
down less than 1 percent, and rose 3 cents in after- hours trading on