CARLSBAD, Calif. (AFX) - Callaway Golf Co., which makes golf equipment and clothing, said Wednesday its second-quarter profit jumped 23 percent, but fell short of Wall Street expectations, with margins that were worse than the company anticipated.
Trading in Callaway's shares were halted in after-hours session.
Callaway earned $22.5 million, or 33 cents per share, compared with $18.4 million, or 27 cents per share, for the same quarter in 2005.
Results for the just-ended quarter include 3 cents per share in stock-option costs and 2 cents per share in one-time charges. Excluding items, Callaway earned 38 cents per share versus 30 cents per share a year-ago.
Analysts, on average, expected per-share earnings of 45 cents, according to a Thomson First Call survey.
Revenue grew 5.8 percent to $341.8 million from $323.1 million in the year-ago period. Analysts expected revenue of $331.3 million.
'Our second quarter gross margin results did not meet our expectations due to some unanticipated execution issues and cost increases,' said President and Chief Executive George Fellows. 'Initiatives are in process to begin improving gross margins, but they will not impact results until late 2006 and into next year.'
The company said gross margins were hurt by a $3.3 million inventory adjustment.
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