NYSE — Shares of Callaway Golf Co. rose Thursday after the company said it will likely record a third-quarter adjusted profit, compared with Wall Street's projected loss, and raised its outlook for the full year on strong consumer demand.

The company surprised investors Wednesday by predicting it will report third-quarter profit, excluding items, of up to 6 cents per share _ easily topping Wall Street's current forecast for a loss of 5 cents per share. Callaway also projected quarterly revenue above analysts' estimates and lifted its full-year outlook for earnings and sales.

Wedbush Morgan Securities analyst Rommel Dionisio maintained his "Buy" rating and $24 price target on the stock. Callaway Golf's brand recognition, market share gains from new products and gross margin growth from restructuring could help the stock trade at a 25 percent premium compared with its peers, he said.

"We believe recent manufacturing initiatives to automate the production of golf clubs, as well as the success of the company's premium-priced new Fusion drivers and X-20 irons, drove such gross margin expansion," Dionisio said in a client note.

Susquehanna Financial Group analyst John Shanley, however, remained cautious on the company's new product line and maintained a "Neutral" rating on the stock.

"We have limited insights regarding retailer feedback of the company's new product initiatives for fiscal 2008, in what is becoming an increasingly difficult retail environment," Shanley said in a client note. Despite these concerns, he did raise his third-quarter forecast to a profit of 5 cents per share, excluding items, from a previouly forecast loss of 5 cents per share.

Susquehanna analyst Christopher Svezia, who cowrote the note with Shanley, said in a phone interview that Callaway Golf's higher-income customers may be limiting their spending as worry of a recession spreads.

"You can't ignore who Callaway Golf distributes to," Svezia said in a phone interview. "Potentially there could be some headwind," related to the recent credit crunch.

Shares of Callaway Golf rose $1.78, or 11.7 percent, to $17.05 in Thursday afternoon trading.