Pearson sees lower profit
The education provider struggles with slowing demand after selling media titles such as the Financial Times.
|||London - Pearson forecast declining earnings for this year and announced a new cost-reduction program as the education provider struggles with slowing demand after selling media titles such as the Financial Times.
Earnings, excluding some items, will be 50 pence (71 cents) to 55 pence a share in 2016, the London-based company said Thursday in a statement. Analysts had predicted 63 pence, the average of estimates compiled by Bloomberg. Earnings in 2015 were 69 pence to 70 pence, Pearson said. Analysts estimated 70 pence.
The company, now focusing on education after selling the Financial Times newspaper and a stake in the Economist magazine last summer, in October had its biggest slump in London stock trading since at least 1988 after saying full-year profit would be at the low end of its forecast. CEO John Fallon, who has steered Pearson through a reorganisation in recent years, has blamed slowing US college enrollments and fewer textbook purchases for the cooling sales.
The company said it’ll start new cost-reduction measures that’ll result in expenses of about 320 million pounds this year. Since early 2013, the company has eliminated more than 4 000 positions and halved its warehousing capacity for textbooks and other physical media.
“Our competitive performance during the last three years has been strong, but the cyclical and policy related challenges in our biggest markets have been more pronounced and persisted for longer than anticipated,” Fallon said in the statement.
BLOOMBERG