NEW YORK (Reuters) – Playboy Enterprises Inc reported disappointing results as television and print sales of its adult entertainment slumped, and a restructuring charge overshadowed the benefits of cost-cutting.
Playboy, publisher of one of the world’s best-known adult magazines, also said its media businesses are likely to face a tough second-half “with fewer near-term opportunities to grow revenues.” It does not expect year-on-year revenue or profit improvements in the latter-half of the year, compared with the same period last year.
The publisher, which faces eroding advertising sales and mounting competition from free Internet pornography, said on Tuesday that its net loss for the second quarter was $8.7 million, or 26 cents a share, compared with a loss of $3.2 million, or 10 cents per share, in the year-ago period.
Analysts had expected a loss of 23 cents a share, according to Reuters Estimates.
Revenue was $62.2 million, down from $73.4 million in the same period last year, and falling short of the $65.7 million expected by Wall Street analysts. Sales in domestic television, its second-biggest segment, fell 14 percent.
“We continue to see consumer migration from the on-demand platform where we have less shelf space, where our movie networks face considerably more competition, including from the Internet,” said Chief Financial Officer Linda Havard on a conference call with analysts.
Despite the revenue declines, cost-cutting helped the company score operating profit in its top segments. But it spent $9.1 million on costs related to closing its New York office.
Playboy added that its advertising revenue reflected the weaker economy and the resulting decline in spending by both advertisers and consumers.
The company said it expects to report a 47 percent decline in Playboy magazine ad pages in the 2009 third quarter, when the company will publish one fewer issue than in the prior year period.
The magazine — with its nude photo spreads of “Playboy Playmates” along with its “Bunny Ears” logo, videos and associated branded merchandise — has become an American icon since Hugh Hefner began publishing it in 1953.
As it moves beyond print and television, Playboy has expanded its licensing of its famous brand at nightclubs and on clothing and other accessories.
The company said the global economic slowdown has pinched royalty payments in its licensing business, but it is optimistic about expanding into new regions, including Latin America.
It expects the licensing segment to show year-over-year revenue and income growth in the 2009 second half, fueled by a strong fourth quarter.
Shares of Playboy hovered near unchanged on Tuesday morning, at about $2.42 on the New York Stock Exchange.