CHICAGO - Lower revenues and increased costs in Playboy Enterprises’ Entertainment Division pulled down the company’s third quarter profit numbers by about two thirds.
Despite an overall loss forecast for the quarter, the company managed a $1.1 million profit for the quarter ending Sept. 30, on $82.3 million in revenue, compared to the same period last year when it posted a $3.3 million profit on $80.9 million in revenue, the company reported today.
Playboy is currently trading at $11.20 a share, with a 52-week high of $15.88, reached last Nov. 18 and a 52-week low of $8.90, reached on June 14.
Analysts polled by Thomson First Call had forecast a loss of 3 cents a share on estimated revenue of $79.4 million.
“The quarter's results reflected the continued strength of our growth businesses of global licensing and new digital media, both of which reported double-digit profit gains,” said Chief Executive Christie Hefner.
“Domestic TV business remains in transition and publishing challenging,” Hefner said adding that the company decided not to lower its outlook for the year.
“Our goal is to maintain our leadership position. To that end, in TV, we just launched new movie networks, which offer consumers better programming, packaging and scheduling. In addition, we continue to encourage operators to offer and market Playboy TV as a subscription-on-demand package, which we believe is a compelling new product. However, because of the recent introduction of these products… we do not yet have enough data to determine how well we are performing, which makes it difficult to make near-term projections.”
The company still expects to earn 5 to 10 cents a share for the year, compared to a loss of 2 cents in 2005 and a new Wall Street forecast of 7 cents a share.
The Entertainment Group’s third quarter income was $5.8 million, or down 18 percent from $7.1 million a year ago. Revenues in the same period rose 5 percent to $50.2 million from $47.8 million.
Its domestic TV business saw an overall decline of 19 percent, while its publishing side also struggled with an estimated $800,000 loss, compared to a $700,000 loss a year ago.
Licensing was one of the company’s bright spots as it reported a 41 percent rise in income to $4.6 million compared to a year ago. The company said the improved results were due to increased international royalties.
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