There's nothing that I love more than spending a nice relaxing day on the golf course. With all the snow on the ground right now, golf isn't much more than a dream, but it gives me some time to look at golf stocks and the struggles they've gone through lately. And it gets me wondering about how such an expensive sport can be struggling so much.

Let's start with the good news. Despite Callaway Golf (NYSE: ELY) reporting disappointing news last quarter that saw revenue fall 8% and earnings far below expectations, the full year isn't looking quite as bad. Sales for the first nine months of the year were up 2.2%, and the company has a small slice of net income going into the fourth quarter. But the fourth quarter is typically a loser. Callaway doesn't have any debt, so there's nothing forcing major changes right now.

In the most recent quarter, operating costs were up despite falling sales. That's not exactly a great sign. And even though free cash flow is positive and cash on hand stands at $110.9 million, the company isn't making investments in its future, cutting capital investments in half over the past four quarters.

Despite all this, Callaway's stock has been on a tear, climbing nearly 30% in the past six months. Maybe the market sees improvement I don't, but Callaway just doesn't seem to have its swing in tune right now.

Elsewhere on the course
In early December, Fortune Brands (NYSE: FO) decided to split up its business into spirits, home and security, and golf products. Fortune's golf business isn't doing quite as poorly as Callaway, but it isn't exactly hitting 300-yard drives down the middle of the fairway either. Golf sales were down 4.8% last quarter, and the segment's operating income fell 43.3%. Maybe management will be able to put more focus on the golf business as a separate entity?

Golf's struggles seem to be pretty isolated in the sporting goods sector. Dick's Sporting Goods' (NYSE: DKS) last quarter was a blowout, and the company is planning on doubling its store count in the future. Under Armour (NYSE: UA) has also seen plenty of success expanding its business.

Maybe golf will rebound in 2011 and the $300 driver will again become a vogue item to have in your golf bag. If not, 2011 could be a rough year for golf stocks.

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