Playboy Enterprises (PLA) is still in the red, but the company is making huge strides in its restructuring and has cut its quarterly loss to just 83 cents per share from $4.40 a year ago. Segment income also nearly doubled, from $1.1 million to $2.1 million.

This is a dramatic leap ahead for the bunny brand at a time when consumer confidence appears to be on the mend. But is Playboy gaining momentum at the perfect time to make a dramatic comeback, or does Hugh Hefner's media empire still have serious troubles ahead as it struggles to rebrand itself in the digital age?

Chances are it's the latter. After all, a loss is still a loss no matter how much things have improved in Playboy's latest earnings report. And the reality is that the company hasn't posted a quarterly profit in well over a year. Adding to the negative outlook is the fact that lower revenues in PLA's media businesses led to a 13% decline in fourth-quarter revenues year-over-year from $69.8 million to $60.6 million.

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Playboy's CEO was rightly subdued in his assessment of Playboy's earnings improvement. Chief Executive Officer Scott Flanders said, "We are a long way from effectively monetizing the power of the Playboy brand and that our operations are subscale in industries dominated by large players."

That's not exactly a ringing endorsement of the Playboy brand. However, bulls on the bunny are right when they say PLA is moving in the right direction. Perhaps a few more quarters of improvement could see the company return to profitability.

But at this point, perhaps the most realistic goal for Playboy is to improve its operations enough to spark interest in a buyout from someone who could really leverage the brand to maximum profits. As Rick's Cabaret (RICK) proved with its plan to buy out rival "gentleman's club" operator VCG Holding Corp (VCGH), size really does matter in the adult entertainment industry.

Playboy simply doesn't have the impact it once did, and will continue to see a rough road for quite some time. A buyout is the quickest and simplest solution for execs and shareholders -- but it will take a few more quarters of improving results for us to reach that point.

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