Callaway Golf Company Earnings Preview

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While Callaway Golf Company (NYS: ELY) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Wednesday, Jan. 25. Callaway Golf, together with its subsidiaries, designs, manufactures, and sells golf clubs and golf balls.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Callaway Golf Company while the remaining half rate the stock as a buy. Analysts like Callaway Golf Company better than competitor Johnson Outdoors overall. Zero out of one analysts rate Johnson Outdoors a buy compared to five of 10 for Callaway Golf Company. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $153.5 million in revenue this quarter. That would represent a decline of 17.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is a loss of $0.40 per share. Estimates range from a loss of $0.54 to a loss of $0.32.

What our community says:
CAPS All-Stars are solidly backing the stock with 88% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 83.7% assigning it a rating of "outperform." Fools have embraced Callaway Golf Company and haven't been shy with their opinions lately, logging 140 posts in the past 30 days. Despite the majority sentiment in favor of Callaway Golf Company, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

27.4%

37.5%

43.3%

29.9%

Operating Margin

(25.5%)

(3.7%)

8.0%

(22.7%)

Net Margin

(36.1%)

(23.2%)

4.5%

(17.4%)

For all our Callaway Golf Company-specific analysis, including earnings and beyond, add Callaway Golf Company to My Watchlist.

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