July 26, 2011 / 9:54 PM / in 6 years

UPDATE 1-Callaway Golf Q2 loss narrower-than-expected, begins job cuts

* Says cut 7 pct jobs last week

* Sees restructuring benefits in H2 2011

* Q2 adj loss/shr $0.01 vs est loss/shr $0.02

* Q2 rev $274 mln vs est $270.1 mln

* Sees loss in FY11 (Follows alerts)

July 26 (Reuters) - Golf gear maker Callaway Golf Co , which posted a narrower-than-expected quarterly loss, said it has started cutting jobs, and expects to post a full-year loss.

The Carlsbad, California-based company said it has begun its restructuring plan, including the elimination last week of about 7 percent of positions globally, and expects to see the benefits in the second half of the year.

Callaway said it will reinvest up to half of the $50 million of annual savings it expects from the restructuring process in demand creation initiatives.

The company has reported losses over the past two years as a rebound in the U.S. golfing industry didn’t pan out as it had expected.

U.S. golfers had scaled back spending on the pricey sport during the recession and many had expected a recovery last year -- but things didn’t go according to plan, forcing the company to cut costs and restructure its business.

The company expects $15-$20 million pre-tax charges related to the restructuring, including $5 million recognized in the second quarter.

The company, which said in June it would cut jobs as it tries to save money, posted a net loss of $63.6 million for the second quarter, or $1.03 per share, compared with a net income of $11.5 million, or 14 cents per share, last year.

Excluding items, the company posted a loss of 1 cent per share, while analysts on average had expected a loss of 2 cents per share, according to Thomson Reuters I/B/E/S.

Second-quarter revenue was $274 million, compared with analysts’ expectations of $270.1 million.

Callaway shares closed at $6.53 on Tuesday on the New York Stock Exchange. (Reporting by Eileen Anupa Soreng in Bangalore; Editing by Viraj Nair)

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