Callaway (ELY) Sees Big Q2 Short Fall, Shares Plummet

June 15, 2010 7:54 AM EDT
Callaway Golf Co. (NYSE: ELY) announced on Monday that it expects to see second-quarter profit and sales roughly flat with the same period a year ago, and well below the expectations of Wall Street, pushing shares down following the news.

The golf club and accessories maker said that it is looking for earnings in the second quarter in the range of 10 cents to 15 cents per share, which includes a penny per share in charges for restructuring. The Street was looking for profit of 33 cent per share.

The company is also looking for sales in the period to be between $295 million to $305 million, compared to the consensus of $328.2 million.

In the same period last year, Callaway earned 10 cents per share and sales of $302 million, which fall in the range of what the company is guiding for in the three month period this year.

"As we discussed throughout the year, 2010 will be the first step for the golf industry and the Company toward a full recovery from the recent global economic crisis," commented George Fellows, President and Chief Executive Officer. “The increased economic and political instability in Asia and Europe, the tentative nature of consumer spending so far this year in the United States, and unfavorable weather conditions in many of the Company's key markets this year, are all factors slowing the pace of the recovery."

The company is still expecting to post a profit for the year, and is scheduled to report second-quarter results on July 28.

Shares of Callaway have fallen 9.47 percent in premarket trade on Tuesday to $6.88.

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