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Stocks in Motion: Callaway

Mark Martinez

Shares of Callaway Golf(ELY Quote) were among the NYSE's losers Wednesday after the company suspended its earnings guidance and warned that it would not meet third-quarter and full-year earnings and sales expectations.

The golf club maker said that it no longer expects to reach its previously announced guidance of third-quarter sales of $150 million to $160 million and a loss of between 37 cents and 42 cents a share. The company also said that it doesn't expect to post a full-year profit of 15 cents to 25 cents a share on sales of $975 million to $990 million. Callaway said it was suspending its guidance because of several unknowns, including re-order status for the remainder of the year and the timing of new product launches. "We are engaged in a full business review and based on our initial evaluation, we have concluded that guidance should be suspended," the company said.

Analysts polled by Thomson First Call were expecting a third-quarter loss of 37 cents a share on sales of $165.4 million. For the full year, they were expecting earnings of 43 cents a share on sales of $974.8 million. Shares of Callaway traded down $2, or 16.3%, to $10.30.

Coca-Cola(KO Quote) fell after it warned that third-quarter and second-half earnings results would not meet expectations. Excluding impairment charges, the beverage giant now expects to post a third-quarter profit of 46 cents to 48 cents a share. For the second half of the year, it expects to post a profit of 88 cents to 92 cents a share.

Analysts were expecting third-quarter earnings of 54 cents a share and second-half earnings of 99 cents a share. Coca-Cola said unfavorable volume trends in North America and Germany, plus unseasonably cool and rainy weather in its Northern European markets that resulted in volume declines, led to the shortfall. Shares of Coca-Cola traded down $1.71, or 4%, to $41.16.

Shares of Best Buy(BBY Quote) rose after the company posted second-quarter earnings and sales that were better than expected. Excluding items, the consumer electronics chain posted a profit of 53 cents a share on sales of $6.08 billion. Analysts were looking for earnings of 51 cents a share on sales of $6.06 billion. Looking ahead, Best Buy forecast third-quarter earnings of 41 cents to 47 cents a share. Analysts had been expecting earnings of 44 cents a share. For the full year, Best Buy expects to post a profit of $2.87 to $3 a share, which excludes the second-quarter charge of 7 cents. Analysts are expecting full-year earnings of $2.90 a share. Shares of Best Buy traded up $2.32, or 4.6%, to $52.61.

TXU(TXU Quote) rose after the company said it would buy some of its debt, and possibly repurchase some of its shares. The power company said that it would buy 11.4 million outstanding corporate units, up to 8.7 million Income PRIDES (synthetic securities consisting of a forward contract to purchase the issuer's underlying security and an interest bearing deposit), and any and all of its floating rate convertible senior notes due 2033. TXU also said that it "may" repurchase up to an additional 10 million shares of its common stock, subject to market conditions and other factors. Shares of TXU traded up $1, or 2.3%, to $44.68.

Shares of Gottschalks(GOT Quote) rose after the company outlined its future growth plan. The department store chain said it expects to post a 2005 profit of 65 cents to 70 cents a share and expects earnings growth of 50% through 2006. What's more, total sales are expected to grow by more than 3% annually as a result of the company's plan to open two new stores a year during 2005 and 2006. In August, the company said it expects to earn 41 cents to 43 cents a share during 2004. Shares of Gottschalks traded up $1.08, or 22.4%, to $5.90.

NYSE volume leaders included Lucent(LU Quote), down 9 cents to $3.32; Nortel Networks(NT Quote), down 22 cents to $3.80; EMC(EMC Quote), down 37 cents to $10.75; Pfizer(PFE Quote), down 27 cents to $31.85; and Texas Instruments(TXN Quote), down 54 cents to $21.85.

Nasdaq volume leaders included Oracle(ORCL Quote), up 78 cents to $11.33; Cisco(CSCO Quote), down 79 cents to $19.56; Intel(INTC Quote), down 35 cents to $20.42; Microsoft (MSFT Quote), down 25 cents to $27.19; and Sirius Satellite Radio(SIRI Quote), down 1 cent to $2.89.