Pearson on track after first-quarter revenue edges up
LONDON (Reuters) – British education publishing company Pearson said it was on track to return to underlying profit growth this year after revenue rose 1 percent in the first quarter – the quietest for a firm aligned to the academic year.
Chief Executive John Fallon said Pearson had made a good start to 2018, and it still expected to report its first rise in profit for six years in 2018.
Pearson has struggled to adapt quickly enough to the shift to digital and changes in the education market in recent years, resulting in a string of profit warnings.
It said it grew in markets like Britain and North America in the quarter, but the gains were largely offset by a drop in emerging markets due to the phasing of sales to South African schools.
US higher education courseware grew slightly, it said, but the rise was down to lower returns from resellers rather than any recovery in gross sales, and underlying pressures in the sector remained.
It forecast a drop in net sales for the unit of up to 5 percent this year and next as students move from expensive textbooks to online services and rental products.
Pearson said talks on a sale of its US K12 business, which provides courseware for schools, were “progressing”. It said in February it was putting it up for sale.
Shares in the company, which have risen 13 percent since the start of the year, were trading up 3 percent at 855 pence in early deals.