Despite increased licensing revenue at Playboy Enterprises, declining sales and operating losses at the company's flagship magazine have hurt the company in the eyes of Wall Street investors.
According to CNNMoney.com, Playboy's stock has been a volatile performer on Wall Street, but the shares have not taken part in the market's recent rally.
Shares of the company — which will release its first quarter results on Tuesday — have fallen 10 percent already in 2007 and are only trading slightly (15 percent) above their lowest in fifty-two weeks. Based on consensus estimates from Thomson Financial, Wall Street analysts are predicting only a three percent sales increase for the company from this same period last year.
Playboy has seen rapid jumps in both its licensing business — mainly due to the new Playboy club in the Palms casino in Las Vegas — and its "new" media, such as mobile and online services, but analysts said these gains have failed to compensate for sluggish prospects in the company's publishing and TV divisions.
"Investors are looking for stabilization in traditional media," David Bank, an analyst with RBC Capital Markets told CNNMoney.com. "People are convinced that licensing and digital are good businesses that can contribute high growth. But is it enough to offset weakness in the traditional business?"
According to the report, despite a recent flurry of deals and takeover bids in the media world, it appears as though Playboy is not up for sale and there is no consideration to take the company private.
