Shares of Big Bertha creator Callaway Golf (NYSE:ELY) sank (much like one of my drives into a water hazard) by more than 20% yesterday after the company reported weakening sales trends. In what's typically the most profitable time of year for the company, it can instead expect another disappointing quarter.

Callaway lowered its second-quarter earnings projection to a range of $0.10 to $0.15, well below the $0.60 per share analysts were anticipating. Total sales, which were expected to top $330 million for the quarter, are now likely to fall to a range of $290 million to $295 million. For the year, the company has lowered expectations from a range of $0.82 to $0.97 to $0.10 to $0.15 per share. Just one year ago, Callaway earned $0.52 per share, and that was considered a disappointment.

The company's negative performance can be attributed to several factors. Callaway is suffering losses from its Top Flite operations that have been larger than the company anticipated. The international market has also had an adverse effect on the company's bottom line. In Japan, sales are expected to fall by 20% to 25% from a year ago. The biggest downfall for Callaway, however, has been in the area for which it is most popular: its Big Bertha brand of oversized drivers.

In a market that has grown increasingly competitive in recent years, Callaway was hoping for a slowdown in the offering of lower-priced products from its competitors. Instead, the competition's price-slashing pace has increased in the past six months. Drivers that were priced at $399 less than six months ago are now selling for half that price and, in some cases, even less. As a result, Callaway has been forced into selling a larger portion of its products at discounted prices.

So, is there any good news? Well, actually, yes. Callaway expects to maintain its top position in the U.S. in sales of irons and putters. The company also expects its Callaway Golf ball business to post a profitable quarter with a strong increase in year-over-year sales. Unfortunately, these positives will not offset the negativity resulting from the titanium drivers business segment.

One more piece of good news, though, is that the company is looking forward to finishing the year with net cash from operations totaling $60 million with virtually zero debt. Callaway is targeting about $30 million in capital expenditures, so it should generate about $30 million in free cash flow.

Callaway plans to continue doing what's necessary to maintain its impressive market share, including lowering prices and eliminating products that don't generate appropriate returns. I believe that, based upon its brand name and popular product lines, Callaway will be able to get back onto the fairway. It will, however, likely take a bit of time before it's back on top of its game.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own shares of Callaway Golf.