Pearson keeps on pessimism

Pearson keeps on pessimism

LONDON - Reuters
Pearson keeps on pessimism

British publisher Pearson said on December 11, 2012 that its flagship business newspaper The Financial Times was not for sale, in response to recent media speculation. AFP photo

British education and media group Pearson warned on Jan.21 it expects tough market conditions to continue in 2013 after a weak fourth-quarter hit earnings last year.

The owner of the Financial Times newspaper and Penguin books publisher said it now expects to report on Feb. 25 adjusted earnings per share of around 84 pence for 2012, below the 84.9 pence it had predicted in October, due to weaker educational funding in developed markets and sluggish advertising.

The result had already expected to be down on the previous year’s earnings of 86.5 pence a share due to the sale last year of its 50 per cent stake in the FTSE International market indexes business to the London Stock Exchange, which it said contributed 2.2 pence a share to earnings in 2011.

The rare downgrade, from a group that is more used to surprising in the other direction, knocked its share price down 3.6 percent to 1193 pence, slightly below the level they were trading at the start of the year following a jump last week. 

“If you look at the statement it’s pretty clear that 2013 is going to be another grim year,” Liberum analyst Ian Whittaker said. 

The long-running concerns over the strength of education spending, particularly in the United States, have led to Pearson shares underperforming the STOXX Europe 600 media and publishing sector index in the last 12 months with Pearson down over 3 percent while the index has risen nearly 15 percent.