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Volume 27 No. 5
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Callaway Golf's Q3 Revenue Up Thanks To Lower Operating Costs, Market Share Gains

Callaway Golf reported "higher revenue and a smaller loss" for its FY Q3 than analysts expected, "thanks mostly to market share gains, lower operating costs and foreign currency hedges," according to Mike Freeman of the SAN DIEGO UNION-TRIBUNE. Callaway "posted quarterly sales" of $169M, above the $161M estimate of Wall Street. Sales were 5% "lower than the same quarter last year, but that was because of the timing of new product launches." Callaway lost $1M, or 1 cent per share, in a quarter that is "usually slow for golf equipment sales." Last year, Callaway lost $21M, or "32 cents a share," in Q3. Analysts "expected a loss of 27 cents a share." Meanwhile, Callaway has "kept a lid on costs," which resulted in an $8M "improvement in operating expenses" for Q3. It also booked a $5M "benefit from foreign currency hedges." About half of Callaway’s revenue "comes from overseas customers." Freeman notes Callaway "now expects sales" of $890M for FY '14 -- up from $843M in '13. The company "forecasts a full-year profit of 15 cents to 18 cents per share, compared with a loss of 31 cents per share last year." That would bring Callaway "back to being profitable for the first time" since '08 (SAN DIEGO UNION-TRIBUNE, 10/24). At presstime, shares of Callaway Golf were trading at $7.99, up 11.75% from the close of business on Thursday (THE DAILY).