Big Bertha below par for Callaway

DISAPPOINTING sales of the much-heralded 'Big Bertha' driver have led to a dramatic downgrade in profit forecasts at California-based golf equipment maker Callaway.

Callaway chairman Ron Drapeau now has sales targets of between $975m (£533m) and $990m for 2004 against the $1.03bn predicted in April.

Drapeau expects second-quarter sales of between $290m and $295m and earnings of between 10 cents to 14 cents a share. Wall Street had been expecting the company to post a profit of 60 cents - excluding extraordinary items - on $331m in sales.

'While Big Bertha has been able to capture a reasonable and growing-share of the market, and has been successful by many measures, it has fallen short of our expectations and does not appear to be the right product to recapture our historic share at the moderate price point,' Drapeau told Wall Street analysts.

'We are disappointed with the message we had to deliver, but I can assure you we are working diligently to turn it around.'

The company has also been hit by bigger-than-expected losses at its Top-Flite Golf operations which it bought last year in a bid to turn around its own unprofitable golf ball business.

Drapeau says part of the problem is a crowded market for drivers that has led to aggressive pricing by competitors. As an example, he said a recently introduced competitor's product that sold for $399 only months ago is now advertised at $199 or even lower.

The company has also take a battering because of the size of its woods. The Big Bertha's clubhead, despite its name, at 360cc is also smaller than other drivers which are closer to the official size limit of 460cc.

At Top-Flite, integration charges and excess stocks have taken their toll.

Sales in Japan are also struggling due to a weak local economy and currency fluctuations that affected pricing and Drapeau expects them to be as much as 25% below 2003 levels.