Pearson shares lose almost 17% after publisher warns on earnings
The education publisher Pearson saw its stock fall 16.69 percent today after the company warned that earnings would come in at the lower end of a range of the previous forecast.
“Cyclical and policy related factors made some of our largest markets weaker than we expected with, in particular, lower Community College enrolments and higher returns affecting the US higher education market; and lower purchasing in certain provinces affecting the school textbook market in South Africa,” Pearson said in a statement.
“These are factors that we’ve been grappling with for some years,” Pearson’s Chief Executive John Fallon told Reuters. “It’s frustrating they are taking longer to work their way through than we would have liked, but we are confident they will work their way through.”
Pearson recently sold the Financial Times Group to the Japanese publisher Nikkei Inc. In 2014, FT Group contributed £334 million in sales and £24m of adjusted operating income to Pearson.
Meanwhile, things are not all well at the Financial Times either, with staff threatening to strike over the issue of pension cuts – or perceived cuts, as Nikkei denies the claim.
“The suggestion that the new pension plan has been designed to take £4m from staff on a final salary pension scheme is categorically untrue,” said a Nikkei spokesman. “The changes are about supporting the long-term strength and sustainability of the FT and building a consistent plan for all employees. Any savings will go toward additional contributions to those affected, investment in the business for the benefit of all, and offsetting costs now borne by the FT, which were previously borne by Pearson.”