Callaway Earnings Rise 23% but Miss Forecasts
Callaway Golf Co. of Carlsbad, Calif., said second-quarter profit jumped 23% but fell short of Wall Street expectations.
Callaway said it earned $22.5 million, or 33 cents a share, compared with $18.4 million, or 27 cents, a year earlier.
Results include 3 cents a share in stock-option costs and 2 cents in one-time charges. Excluding items, Callaway earned 38 cents a share, less than the 45 cents expected by analysts polled by Thomson Financial.
Revenue grew 5.8% to $341.8 million. Analysts expected revenue of $331.3 million.
“Our second-quarter gross margin results did not meet our expectations due to some unanticipated execution issues and cost increases,” said President and Chief Executive George Fellows. “Initiatives are in process to begin improving gross margins, but they will not impact results until late 2006 and into next year.”
The company said gross margins were hurt by a $3.3-million inventory adjustment.
Shares of Callaway fell 16 cents to $12.51 before the earnings announcement.
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