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Callaway Golf climbs on 3Q results and outlook

NEW YORK (AP) -- Shares of Callaway Golf jumped to a three-year high Friday after the company posted strong third-quarter results and raised its forecasts for 2013.

THE SPARK: Callaway said market conditions improved and better weather meant more rounds of golf for customers in the Americas and Europe. The company said its profit margins have gotten stronger and its turnaround plan is working.

Excluding one-time items, Callaway said it would have posted a loss of 18 cents a share. Revenue rose 20 percent to $178 million.

FactSet says analysts had forecast an adjusted loss of 28 cents per share and $152.6 million in revenue.

THE BIG PICTURE: Callaway Golf Co. has been working to cut costs and focus on its Callaway and Odyssey products. In 2012 the company sold its Top-Flite and Ben Hogan brands and transitioned to a licensing arrangement for clothing and footwear in North America.

Callaway now expects to report about $836 million in revenue in 2013, up from its previous estimate of $810 million to $820 million. The company said it may turn a profit for the year.

THE ANALYSIS: KeyBanc analyst Scott Hamann said he now thinks the company will turn a profit in 2013 and said the company will keep launching new products in the new year.

"Calloway reported a clean beat and raise for the first time in many years, driven by sustained momentum in new product initiatives that resulted in market share gains globally, coupled with solid execution throughout operations," he said. Hamann rates the shares "Buy" with a price target of $9.

SHARE ACTION: Callaway Golf stock rose $1.31, or 18 percent, to $8.57 in afternoon trading. Earlier they reached a three-year high of $8.59.