Callaway shares plunge 10 percent after warnings of quarterly loss

[Gxgolfer]

http://www.pga.com/news/industry/callaway101706.cfm

10.17.2006 08:47 pm (ET)

 

NEW YORK (AP) -- Shares of Callaway Golf Co. slumped on Tuesday, a day after the maker of golf equipment and apparel said it expects to post a wider third-quarter loss due to slow sales of its Top-Flite and Hogan brand products.

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Preliminary results show the company widened its loss to between 17 cents and 19 cents in the third quarter, compared with a loss of 7 cents per share during the same period last year. Excluding stock options expenses and other charges, Callaway said it expects to post a loss of 12 cents to 14 cents.

 

Analysts polled by Thomson Financial had expected a profit of 8 cents per share.

 

Shares of Callaway tumbled $1.53, or 10.57 percent, to $12.61 in afternoon trading on the New York Stock Exchange. The shares have been trading in a 52-week range of $11.49 to $17.42.

 

JPMorgan analyst Robert Samuels lowered his full-year earnings estimate to 26 cents per share from 52 cents per share and full-year 2007 estimate to 38 cents per share from 78 cents per share. Samuels' third-quarter earnings estimate dropped to a loss of 17 cents per share from a profit of 4 cents per share, while he forecast a wider fourth-quarter loss of 24 cents per share from a previous estimate of a loss of 18 cents per share.

 

"Given that management never provided any type of sales or earnings per share guidance, going forward we believe Callaway needs to better manage expectations," Samuels said in a client note.

 

Rommel T. Dionisio, an analyst with Wedbush Morgan Securities, said in a client note that weak sales of Top-Flite and Hogan offset the strength of its Callaway Golf and Odyssey brands.

 

"Management plans a complete relaunch of the Top-Flite line of value-priced balls in 2007, but we remain somewhat skeptical about the near-term prospects of turning around this troubled brand in the marketplace that quickly," he wrote.

 

Dionisio lowered his full-year earnings estimate to 36 cents per share from 75 cents per share, and his full-year 2007 earnings estimate to 88 cents per share from $1.20 per share.

 

Analyst Alexander Paris of Barrington Research Associates Inc. cut his rating for Callaway to "Market Perform" from "Outperform."

 

"We believe the company has a well-devised, three-year restructuring plan that seems to be on track, but it also appears that there is a greater lack of visibility on how the company will fare with the re-launching of the Top-Flite and Ben Hogan brands than is consistent with our top rating," he said in a client note.

[choeppner]

Now it's time to think i they will pop back up when the new products hit, or if it is time to dump the shares. I never agree with the Top Flite brand. Thanks for posting this GX. Time to call the Broker

 

-CHRIS-

[Hifade]

Ely just flipped over for the 4th time in 2 years.

[choeppner]

I think they should liquidate either top flite ot Hogan. They are just bringing them down.

 

-CHRIS-

[HipCheck]

I think they should liquidate either top flite ot Hogan. They are just bringing them down.

 

-CHRIS-

 

They're naturally going to drag them down when they don't put any money into them. Who plays TF? Who plays Hogan? I don't know anymore.

 

It seems like Hogan never makes money, but it's scores of owners over the years only make money from buying and selling the company. :drinks:

[choeppner]

I thought theywere on the rise when they came out with the new Apex's. The only time I see Top Glite is at the local wal-mart. One thing that might help is if callaway invested even 1/4 of what they use on their R&D to either the Top Flite or Hogans. Pick one, then liquidate the other. Just makes sense.

 

-CHRIS-

[shoe295]

So if Callaway "never provided of sales or earnings per share guidence" according to Mr. Samuels what he projected was a guess. Oops..guessed wrong eh. And then he blamed Callaway for his bad guess. Interesting. Most of it is voodoo anyway..