Callaway Golf Co. said first-quarter profit rose 24%, helped by lower operating expenses and growing demand for wood golf clubs.
The Carlsbad-based golf equipment maker, known for its Big Bertha line of clubs, said net income was $22.8 million, or 33 cents a share, compared with $18.4 million, or 27 cents, a year earlier.
Results included 2 cents a share for stock-based compensation and 1 cent a share associated with the integration of the company's Top-Flite operations.
Four analysts surveyed by Reuters Estimates had expected on average earnings of 33 cents a share, excluding items, on sales of $324.5 million.
Sales rose less than 1% to $302.4 million.
"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," Chief Executive George Fellows said.
Sales in the United States and Europe fell 2% and 4%, respectively, while sales in Japan, a key golf market, rose 5%.
Woods were the biggest revenue driver, with 48% growth, compared with a 20% decrease in irons and a 22% decrease in putters.
Sales of golf balls fell 6%. Callaway has been consolidating its golf ball manufacturing operations and integrating the Top-Flite golf ball business into the company's operations.
Operating expenses decreased 6%.
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 fell 12 cents to $15.83 before the earnings announcement.