Things may be looking up for Callaway Golf. Its golf ball business has been counted on for many years, frankly ever since it entered the category, to be growth platform in terms of sales and earnings. While the going has been tough, it may be showing signs of improving.
Through six-months of 2012, golf ball sales are down ($92.4 million versus $99.3 million in 2011) but it made more money than a year ago. Despite the divestiture of Top-Flite, which impacted sales, Callaway reported golf balls contributed $5.7 million in earnings before taxes compared to $3.4 million in the first half of 2011. “Our premium ball is good,” Chip Brewer stated to Wall Street analysts. The street was looking for some indication of an apples to apples comparison since Top-Flite was sold earlier this year and is expected to represent potentially a $25 million drag on future sales. Brewer assured analysts that Callaway golf balls are a positive to the business and profitable.