Shares in Pearson (LON:PSON) have fallen deep into the red in today’s session, even as the blue-chip publisher flagged full-year profit within its guidance range. The company, however, cautioned that revenue at its US higher education courseware business (HECW) had declined.
As of 10:26 GMT, Pearson’s share price had given up 6.59 percent to 912.20p, underperforming the broader UK market, with the blue-chip FTSE 100 index currently standing 0.37 percent lower at 6,869.33 points. The group’s shares have added more than 27 percent to their value over the past year, as compared with about an 11.4-percent drop in the Footsie.
Pearson updates on performance
Pearson announced in a statement this morning that it expects to deliver adjusted operating profit of between £540 million and £545 million for 2018, in line with the group’s guidance of between £520 million and £560 million. The group, however, cautioned that its total underlying revenues had decline one percent, pressured by a five-percent revenue drop at its US HECW business. Pearson further expects US HECW revenue to be zero to down five percent in the current year, as underlying pressures continue.
“We have made good progress in 2018, returning Pearson to underlying profit growth,” the company’s chief executive John Fallon commented in the statement.
The FTSE 100 group said that it expects to deliver adjusted operating profit of between £590 million to £640 million in the current year.
Analysts weigh in on update
“Pearson’s only managed to hit targets through better than expected cost savings, which are masking weak sales trends in the all-important US market,” George Salmon, equity analyst at Hargreaves Lansdown, commented, as quoted by Reuters. “Unfortunately, there’s no sign this market will turn positive for Pearson this year either.”
The blue-chip publisher will announce its full-year results on February 22.