Playboy Enterprises has significantly reduced its losses for the first quarter of the year, on fewer charges due to lower magazine costs and growth in the company's licensing business.

The adult entertainment company posted a first-quarter loss of $1m, or three cents per share, compared to a loss of $13.7 million, or 41 cents per share, a year ago.

Playboy's publishing unit cut its losses to $1.1m from $3.6m. Lower manufacturing, shipping and promotional costs of the magazine compensated for a 48 per cent decline in domestic magazine revenues.

Revenue in the licensing business was, however, up 6 per cent to $9.9m, as the company continued its expansion. Playboy chief executive Scott Flanders said the company is keen on outsourcing its business operations.