Playboy Enterprises (NYSE:PLA) reported earnings for 2004 last week, and they certainly were an improvement over the prior year.

Let me don the silk pajamas and pore over the numbers.

Total revenues jumped 4.3% to $329.4 million, compared to 2003. Operating income increased 4.7% to $31.6 million. Backing out a couple of non-operating events (a litigation settlement in 2003's fourth quarter and an insurance recovery in 2004's fourth quarter), the company said that it earned $4.4 million ($0.12 per share) for all of 2004, compared to $0.9 million ($0.00 per share) in the previous timeframe.

CEO Christie Hefner cited restructuring of debt as an important earnings helper for the year. She also mentioned the licensing and entertainment segments as drivers going forward. Indeed, some categories of licensing possessed momentum: International licensing revenues jumped to $12.1 million (up from $8 million), and entertainment licensing improved to $2 million (up from $1.4 million). Other categories of licensing didn't do so well -- domestic licensing decreased.

The entertainment segment showed revenue strength internationally as well, and the e-commerce and online subscription operations grew nicely. The segment that requires a lot of marketing muscle is the publishing division, in which total revenues declined to $119.8 million from $120.7 million the previous year.

Playboy is certainly a premier brand in the medium of adult-themed entertainment, and the company can capitalize on that by exploring as many cost-containment initiatives as are conceivable. Focusing on licensing will also be key to future growth, as it represents a capital-friendly way to bring in cash. Case in point: Playboy entered into a Las Vegas deal last year; deals like this will improve brand equity in a fiscally acceptable manner.

One of the biggest disappointments is the ongoing and obvious weakness of Playboy itself. The legendary magazine, once the heart of the whole enterprise, needs improvements in subscriptions, newsstand distribution, and ad sales. The company needs to regain public mindshare to restore the magazine to its one-time position as the center of commerce. Perhaps the recent video game based on the Playboy Mansion will remind adults who are currently captivated by their Sony and Microsoft consoles of the past celebrity that the rabbit logo represents.

Nevertheless, this annual earnings release does show things heading in a good direction. Those who own the stock are probably, in an overall sense, satisfied with the results. Those thinking of becoming owners must realize that this will be a very long-term play.

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And don't forget the Playboy Enterprises discussion board, where you can talk about the stock and any other bunny-themed issues.

Fool contributor Steven Mallas doesn't own any of the companies mentioned. He also believes that interaction with the video game Playboy: The Mansion is the closest he'll ever get to the genuine article.