Playboy (NYSE:PLA) started its new fiscal year off right last week. Revenues increased 4% to $85.4 million and earnings per diluted share doubled to $0.04. That was certainly better than the fourth quarter's earnings decline.

Although it should be noted that a large stock forfeiture rate, as well as an art sale, benefited the quarter, the gains were mostly offset by severance costs and other expenses. In addition, a lower tax expense aided the results. Still, the wonderful bunnies can rejoice at the easy-on-the-eyes 11% increase in operating income, the excellent 79% rise in income for the licensing segment, and the jump in operational cash flow. According to the 10-Q document, net cash from operations more than tripled to $7.4 million, driven by positive changes in working capital.

Make no mistake, though, Playboy is a company still burdened with some ugly issues. I'm not sure management got the memo yet, but the flagship magazine is in desperate need of help. Shareholders need to see some black ink in the publishing segment soon; a comprehensive, fresh marketing campaign is in order to goose those subscription numbers. It's strange, because I'm a regular viewer of The Girls Next Door TV show, and it would seem to me that Hugh Hefner's glorious lifestyle -- of which I will remain eternally envious -- would eventually resonate once again with the masses. The nice performance of the licensing department would almost seem to indicate that the power of the Rabbit logo should be bringing in more subscriptions; alas, this seems not to be the case. Oh, and did I add that there were declines in domestic television? Add that to the overall conundrum.

Maybe I'm just misty-eyed for days gone by when Playboy ruled the adult-entertainment roost. Now you've got competitors such as New Frontier Media (NASDAQ:NOOF) and Rick's Cabaret (NASDAQ:RICK) is showing investors that there could be alternatives for a portfolio looking for some sexy exposure. And don't forget the biggest fish of all -- the Web.

We'll just have to remain patient as Playboy continues to look for growth. At least this quarter was a decent one overall, with good operational cash flow. Licensing revenues are supporting the company while it tries to get its publishing and domestic TV situation straightened out. The company said that the latter has "stabilized" and that it has been observing strength in its video-on-demand business. I hope that at least a small quantity of that strength migrates over to publishing. It's time that CEO Christie Hefner shakes things up at the segment -- the centerfolds deserve better than this.

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Fool contributor Steven Mallas owns none of the companies mentioned. He thinks the Playboy Mansion is the greatest piece of real estate on the planet. As of this writing, he was ranked 4,951 out of 28,602 rated investors in the Motley Fool CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.