Golfing-equipment manufacturers are looking at 2011 as an opportunity to script a revival, and Callaway Golf (NYSE: ELY) is no exception. Although Callaway has witnessed some signs of a turnaround, the Japanese earthquake has forced the company to take a mulligan once again.

So is Callaway finally poised to take off, or will it continue to be a 10-stroke putter?

Crunching the numbers
Callaway's first-quarter net sales declined by 5.7%, to $285.6 million. A massive 30% drop in sales in Japan -- its second-largest region in terms of revenues -- weighed heavily on overall sales. Strong sales in Europe and the emerging markets, however, did help buoy its top line a bit.

Putting further pressure on margins was Callaway's additional investment in its global operations strategy. As a result, net margin dropped to 4.5% from 6.7% in the first quarter of 2010. That's somewhat understandable as the company prepares for a more international focus.

Cash from operations was still in the negative, clocking in at -$39.4 million compared to -$59.1 million in the year-ago quarter, because of huge increases in accounts receivable.

Turning point?
No talk of business these days is complete without a mention of emerging markets. Callaway holds a 25% market share in the Indian golf market and aims to boost that figure to around 35%. But the company faces stiff competition from manufacturers that have a longer history in India, including Nike (NYSE: NKE), Cobra, Ping, and Fortune Brands' (NYSE: FO) Titleist, which is now in the process of being sold to Fila.

Fools, lend me your ears
With the seasonal nature of the golfing business and the supposed recovery we're witnessing in the company's major markets, I'll be interested in seeing Callaway's results for Q2. Even after a fairly unimpressive quarter, I'm not willing to strike Callaway off my watchlist just yet. This company could still be a big hitter in the future.

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Fool contributor Sarosh Nicholas doesn't hold shares of any of the companies mentioned in the article. Motley Fool newsletter services have recommended Fortune Brands and Nike and have also recommended creating a diagonal call position in Nike. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.