Earnings: Playboy Swings To Net Loss In Q2; Revs Drop 14 Percent
This story was written by David Kaplan.
Despite CEO Christie Hefner's advice to newspapers struggling with the transition from traditional to digital last week, judging by Playboy's (NYSE: PLA) Q2 results, the company still doesn't seem to have a model for others to emulate. The Chicago-based publisher reported a Q2 net loss of $2.1 million ($0.06 per basic and diluted share) compared to net income of $1.9 million (or $0.06 per basic and diluted share) last year. Also, revenues fell 14 percent to $73.4 million from $85.7 million. Playboy cited continued pressure on the media businesses as well as the recent sale of assets and outsourcing of operations that were completed earlier this year. While the company pointed to a 10 percent rise in licensing profits, those benefits were offset by lower media results, leading to a $0.3 million segment loss in Q2 versus $3.9 million in segment income in the same period last year. In a statement, Hefner sought to highlight the Licensing Group's relative resilience in the face of a weak retail market in the U.S. and Europe.
-- Online/mobile declines: This category in the Entertainment Group's revenues dropped $3.2 million to $11.6 million in Q2. Playboy's online/mobile revenues declines were offset slightly by a licensing deal completed in Q1 with eFashionSolutions, which provides e-commerce and catalog operations. Playboy also claimed that online ad sales increased "significantly" during the quarter, though details were not available with the earnings release. Overall, the Entertainment Group segment income was $1.8 million, down $5.5 million from $7.3 million in the prior year period on a $10.6 million revenue decline to $41.2 million.
-- Publishing: The Publishing Group's Q2 segment loss was slimmed to $1.9 million from last year's $2.3 million loss. Revenues were down 9 percent to $20.6 million from $22.7 million, due to lower circulation and ad revenues at Playboy magazine. Playboy said that it expects to report a 10 percent decrease in advertising pages in Q3 compared to year before.
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By David Kaplan