Playboy Losses Widen on Higher Costs

CHICAGO (TheStreet) -- Playboy Enterprises (PLA) reported a loss during the third quarter, primarily driven by impairment and restructuring charges totaling $25.8 million.

For the quarter ended September 30, the company saw a loss of $27.4 million, or 81 cents per diluted share, compared with a loss of $1.1 million, or 3 cents per diluted share, in the same period a year ago. Analysts had expected a loss of 71 cents according to Briefing.com..

Total revenue fell 7% to $52.1 million from $56 million during the quarter as a decrease in entertainment revenue and increased expenses more than offset gains in print, digital and licensing groups revenues.

Expenses related to impairment and restructuring skyrocketed to $25.8 million from $500,000 in the same period a year ago. Programming costs were $22.3 million while distribution agreement expenses came in at $3.1 million.

Corporate expenses rose 38.2% to $7.6 million from $5.5 million due to higher trademark defense costs and fees related to Hugh Hefner's proposal to take the company private.

Entertainment group revenue dropped 20.1% to $19.5 million from $24.4 million on lower U.S. television revenue. Domestic television revenue fell 21% to $9.8 million from $12.5 million, primarily due to DirecTV (DTV) withholding payments of about $3 million for Playboy programming during the quarter.

International television revenue was down 15.9% to $9 million from $10.7 million due to increased competition and an unfavorable foreign exchange rate.

Print and digital revenue was down 5.2% to $21.7 million from $22.9 million, while the 6.4% increase in Playboy magazine revenue to $10 million from $9.4 million was offset by the 11.5% drop in digital revenue to $8.5 million from $9.6 million.

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