New Playboy showing financial virility

Online success has helped co.'s profits rise

Playboy Enterprise’s aggressive cost-cutting and repositioning efforts are paying off. Wednesday the half-century-old men’s entertainment company posted $600,000 in net earnings for the first quarter — an impressive turnaround from last year’s $9.4 million loss for the same period.

Most noteworthy was the company’s spike in online products, considering that the abundance of free Internet pornography has been one of the bunny’s biggest threats. Operating profit for the Online Group was up to $300,000 from a loss of $3.6 million in 2002. Subscriptions for online content more than doubled to $4.1 million.

In the print category, the company made more modest headway, with operating profits rising to $500,000 from a loss of $400,000 a year ago. Playboy magazine’s ad pages were down 4% to 193 through May. (Advertising is a continual struggle for the magazine due to pressure from some feminist and conservative fundamentalist groups, which threaten to blackball Playboy advertisers.)

“Results for the quarter exceeded expectations as each of our business groups reported operating income,” CEO Christie Hefner said, predicting that the company would “report an operating profit for the full year compared to an $8.9 million operating loss in 2002.”

Editorially, the magazine has attracted notice in recent months because editor in chief James Kaminsky, who was brought on board last fall to redirect the publication — without reinventing it, Hefner fille has insisted. Celebrity covers and more men’s fashion are part of the Kaminsky cocktail, along with a new West Coast editor hired for her Hollywood pull.

Based on sale reports, Hefner said that the May issue featuring Torrie Wilson — a WWE “wrestling goddess” — was selling double the usual at newsstands.

The growing popularity of laddie magazines such as Maxim, FHM and Stuff — which at times resemble only slightly more clothed versions of Playboy — may also bode well for the bunny in print. Hefner said she hoped lad mag readers would ultimately mature into Playboy readers.

Stock closed yesterday up 14.87% at $11.43.

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