Pearson says its full-year earnings rose
PUBLISHING group Pearson raised its full-year guidance yesterday, saying it now expects adjusted earnings to be at or above 60p per share (EPS) following a strong performance from its education business.
Pearson, the world’s largest education publisher and the owner of the Financial Times and Penguin Books, said nine-month sales were up two per cent at constant exchange rates after the group traded ahead of expectations.
Despite the tough economic environment, the FT Group and Penguin performed in line with expectations after benefiting from investments in digital products and emerging markets.
“We began 2009 in a cautious mood, wary of the impact of the global economic crisis on our company,” said chief executive Marjorie Scardino. “We have now seen enough of it to say that, though no part of Pearson has been untouched, the company as a whole has proved its strength.”
Pearson’s strong educational business with market-leading testing and digital products, as well as the reduction in its exposure to the volatile advertising market, have made it a favourite defensive stock.
Analysts said Pearson, which had previously targeted adjusted EPS guidance of at least 57.7p, could still surprise further.
“Pearson has raised its guidance by 10 per cent this year,” said Numis. “The fourth quarter remains important, and for Pearson to raise guidance again at this stage indicates to us that this guidance (and our forecasts) are still likely to prove conservative.” UBS also said it saw further upside potential to forecasts.
In education, Pearson said it had gained share and grown faster than expected in North America, with growth of four per cent at constant exchange rates.
Pearson shares, which have risen almost 35 per cent in the last three months, closed at 858.50p.