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California and the West | EARNINGS ROUNDUP

Callaway Posts Narrower Loss; Sales Improve

January 26, 2006|From Reuters

Callaway Golf Co. posted a narrower loss in its fourth quarter, beating Wall Street estimates, as the company continued restructuring efforts and sales improved.

The company said its net loss was $18.7 million, or 27 cents a share, compared with a loss of $28.5 million, or 42 cents, a year earlier.

The results include a charge of 5 cents a share related to the integration of the company's Top-Flite operations and ongoing restructuring.

The Carlsbad-based golf equipment maker is in the midst of a companywide reorganization effort that is expected to save it $70 million before taxes over two years. The company is trying to reclaim market share from lower-priced rivals, improve gross margins and revamp its marketing strategies.

The earnings results beat expectations of analysts for a loss of 37 cents a share, excluding some items, according to Reuters Estimates.

Callaway said quarterly sales rose 7% to $154.5 million, compared with $144.4 million a year earlier. Wall Street had expected revenue of $157.4 million.

Restructuring efforts include consolidating sales forces across Callaway's many brands and golf ball manufacturing operations, as well as the integration of its Top-Flite golf ball business.

Chief Executive George Fellows said the initiatives were paying off, adding that quarterly operating expenses had decreased.

For full-year 2005, sales rose 7% and the company posted a net profit of $13.3 million, or 19 cents a share. That compared with a full-year loss in 2004 of $10.1 million, or 15 cents a share.

Looking ahead, Fellows said Callaway's focus would be on strengthening marketing and enhancing customer service.

The company's shares rose 32 cents to $14.66, up more than 2%.

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