Callaway Golf 4Q loss widens as sales drop

CARLSBAD, Calif. (AP) -- Callaway Golf reported widening fourth-quarter losses Wednesday, but said that it is hitting cost cutting targets and that sales and gross profit margins will improve this year.

Callaway lost $65.6 million, or $1.01 per share, in the quarter compared with a loss of $34.9 million, or 54 cents per share, in the prior-year period.

Removing a tax adjustment, restructuring charges and other items, Callaway lost 41 cents per share, which was a penny worse than expected on Wall Street, according to a poll by FactSet.

"While 2011 was a very challenging year for Callaway, I am pleased with the significant progress we have made over the last six months with our restructuring and reinvestment initiatives," said President and CEO Tony Thornley. "We have achieved our $50 million annual savings target we began last June, implemented a flatter/more streamlined organization structure, and have begun investing a significant portion of those savings in our newly developed 2012 globally integrated brand and marketing initiatives."

The Carlsbad, Calif. company said last summer that it had eliminated 7 percent of its work force as part of its restructuring as the economy took its toll on the sport. Big markets in Nevada and Florida have been savaged by a terrible real estate market, not to mention economic problems in Japan and Europe.

Revenue for the period ended Dec. 31 fell 17 percent to $153.9 million as sales of woods tumbled nearly 40 percent, and sales for irons, golf balls and accessories slid by double digits. Putters sales, however, rose 13 percent.

Sales fell across all regions, which include the U.S., Europe, Japan and the rest of Asia.

For the year, Callaway lost $182.3 million, or $2.82 per share. That compares with a loss of $29.3 million, or 46 cents per share, in the previous year.

The company's adjusted loss was 63 cents per share.

Revenue declined 8 percent to $886.5 million from $967.7 million.

Callaway Golf Co. anticipates adjusted earnings of 40 cents to 45 cents per share for the first half of 2012, with revenue between $610 million and $630 million. Gross margins are expected to be about 44 percent.