Despite Appearing Cheap, Wait For Q1 Earnings Before Taking A Swing At Callaway Golf

Alex Morris submits: When the year started, the golf industry was hoping for a modest recovery. George Fellows, CEO of Callaway Golf (ELY), told investors that he was “cautiously optimistic” for 2010. Management at Fortune Brands (FO), parent company of the Titleist and FootJoy brands, also sounded somewhat upbeat, expecting low single digit growth on the year. Nearly ten months later, the results are pretty across the industry are conclusive: better luck next year.

Trefis submits: Nike Inc. (NKE) is the world’s largest manufacturer of athletic footwear, apparel and equipment. Nike’s 2009 sales totaled nearly $18.5 billion, far ahead of competitors like Adidas AG (ADDYY.PK) and Puma.

Alex Morris submits: On Monday, Callaway Golf (ELY) provided guidance for the second quarter of 2010, and the picture isn’t looking too good. After CEO George Fellows indicated at the end of 2009 that the company was “cautiously optimistic” heading into this year, it appears that the glass is far from half full in June.

Alex Morris submits: Callaway Golf (ELY) reported 1Q 2010 earnings on April 29th, and for the most part reported in the range of analysts’ estimates for the key numbers.

By Angad Guglani:As an avid golfer and gear-head I can say from experience that Callaway (ELY) is not the same company it was in the past. In many ways, Callaway became complacent with its position at the top. For much of the last decade, Callaway manufactured the best selling woods, irons, and putters in the game of golf.

Alex Morris submits: On Friday, July 30, Fortune Brands (FO) released earnings for the second quarter of 2010.

BlueCut Capital submits: Callaway (ELY) pre-announced a weak quarter on June 14th, prompting the Street to quickly turn negative on the name. The company will hold a conference call July 28th, where they will kitchen sink the quarter and flush out impatient longs.

Ockham Research submits: Fortune Brands (FO) is the holding company for a variety of brands including everything from Jim Beam and Maker’s Mark whiskey to Moen faucets to Titleist golf balls.