(Playboy earnings article updated with information from the earnings conference call.)

CHICAGO (

TheStreet

) --

Playboy Enterprises

(PLA)

narrowed its losses in the second quarter, but continued to struggle with declining revenue in the print and digital segments.

For the quarter ended June 30, the company posted a loss of $5.4 million, or 16 cents per diluted share, compared with a loss of $8.7 million, or 26 cents per diluted share, in the same period a year ago. The improvement was thanks largely to lower restructuring expenses, which were down to $1.6 million from from $9.1 million.

Revenue fell 10% to $56 million from $62.2 million during the quarter as the company's total print and digital segment revenue dropped 26.1% to $20.9 million from $28.3 million. Its domestic magazine revenue was down 37.8% to $10.2 million from $16.4 million primarily due to lower circulation and advertising revenue, as well as the company's decision to lower the magazines rate base by 42%.

In November the company made a deal with magazine publisher

American Media

, to handle all of the operations of Playboy magazine such as production, circulation, distribution, sales and marketing. The transition was completed this spring and management said it's pleased with how American Media has reduced costs and boosted advertising and subscription sales.

"We are on track to achieving our stated goal of having the magazine run breakeven in 2011," said Playboy CEO Scott Flanders.

While the company saw declines in revenue in most of its segments, licensing revenue was up 22.8% to $12.4 million from $10.1 million.

"Our goal of reducing overhead expense is a priority, and previous cost reduction initiatives helped offset the revenue decline in the second quarter," said Flanders. "These efforts continue, and the staff reductions we made in the second quarter should yield annual savings of approximately $3.0 million."

For the first half of the year, Playboy recorded a loss of $6.4 million, or 19 cents per share, compared with a loss of $22.4 million, or 67 cents per share, in the same period a year ago.

Revenue fell 12.7% to $108.1 million from $123.8 million. The company's total print and digital segment revenue declined 28.1% to $39.1 million from $54.4 million.

"Looking to the second half of 2010, we expect the print and digital group to return to modest profitability and to see continued solid growth in the licensing group's results. In TV, competition remains intense, and we are likely to see a decline in second half entertainment group profits compared to last year as a result," said Flanders.

>>Hefner Bids to Take Playboy Private

In July Hugh Hefner proposed to buy out the company and make it private. Playboy's board is also considering a bid made by

FriendFinder Networks

, the parent company that publishes Penthouse magazine. In his bid for the company he founded, Hefner indicated that he wasn't interested in selling Playboy to a third party.

-- Reported by Theresa McCabe in Boston.

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