April 20, 2000 10:11am
Playboy Sees Bigger Loss, Cites Web Investment
(CHICAGO, IL) -- Adult entertainment media company Playboy Enterprises Inc. (NYSE:PLA - news) said on Thursday it expects a greater loss in the first quarter compared with last year due to significantly higher investments in its online business.
The company said it expects to report an operating loss for its online business of about $5.7 million for the quarter ended March 31, compared with $2 million last year. Online revenues, however, are expected to grow to about $5.8 million from $2.2 million in the year-ago period.
According to First Call/Thomson Financial, one analyst expected a loss of 7 cents for the first quarter. Playboy reported a loss of 5 cents a share in the year-ago quarter.
A spokeswoman for Playboy declined to comment on the First Call estimate or give additional details on the company's outlook.
``The increased investments signal our desire to move quickly to take advantage of Playboy.com's many growth opportunities as we continue to prepare for the company's planned initial public offering,'' chairman and chief executive Christie Hefner said.
Playboy's Internet unit Playboy.com filed regulatory documents to take itself public in January.
Robert Routh, cable, media and entertainment analyst with Aladenburg Thalmann, said he viewed the announcement as positive news.
``I don't view it as a negative at all,'' he said adding that Playboy.com will be able to recoup all of its losses when it goes public.
Routh said the increased investment demonstrates Playboy management's commitment to strengthening its presence on the Internet and becoming a leader among male lifestyle Web sites.
Routh said he had previously pegged the company's online losses at $1.28 million, and that he would be revising his estimates.
Excluding the online unit, the company said it expects to report increased EBITDA, or earnings before interest, tax, debt and amortization, versus last year's first quarter for its other combined operations.
Shares of Playboy were off 1 3/8 at 15 1/4 on the New York Stock Exchange in morning trade.