Playboy Enterprises Inc. on Tuesday posted a 68 percent drop in quarterly profit, hurt by sluggish advertising at its namesake magazine, but an upbeat forecast lifted the media company’s stock.
The adult entertainment media company posted a weaker-than-expected profit of $4.6 million, or 14 cents per share, down from $14.5 million, or 43 cents a share, a year earlier.
Still, shares in Playboy, which also owns adult TV channel Spice and a licensing business that markets merchandise bearing the Playboy bunny, climbed on the New York Stock Exchange amid the company’s upbeat 2006 forecast.
Playboy, which plans to take a charge of about 10 cents per share to account for stock options, said 2006 earnings per share would likely range between 67 cents and 70 cents. Analysts had been forecasting earnings of 67 cents per share on average, according to Reuters Estimates.
For the fourth quarter, revenue rose 2 percent to $91 million, narrowly topping analysts’ average estimate of $90.3 million. But profit fell slightly short of Wall Street expectations of 16 cents per share.
As has been the case in recent quarters, Playboy’s publishing division proved to be the main drag on earnings, with lower advertising and newsstand sales resulting in a loss of $3.1 million for the division. Publishing sales fell 15 percent.
“We knew this was going to be a challenging year in publishing, as it was for the industry,” Christie Hefner, chairman and chief executive, said in an interview.
Hefner said higher paper prices, a postal rate increase, and weak newsstand sales for almost every category of magazine have plagued earnings in the publishing industry.
Advertising revenue and pages for the company’s namesake magazine are expected to be down approximately 30 percent in the first quarter, compared with a year ago.
Still, eyeing growth in global markets, Playboy has said it is in talks to launch a men’s magazine in India that will not bearing the Playboy name. The company is also looking at other international magazine launches to boost its worldwide presence.
And its licensing earnings continue rise, climbing 89 percent to $5.5 million. Revenue from the licensing unit rose 63 percent to $8 million.
Profit from TV and the Internet fell 19 percent to $11.9 million as U.S. TV revenue fell. Revenue, buoyed by international TV and online subscriptions, rose 6 percent to $56.3 million.