Pearson Shares Fall as Performance Disappoints
July 29 2016 - 5:49AM
Dow Jones News
(Updates, adds detail.)
By Simon Zekaria
LONDON--Shares in education specialist Pearson PLC (PSON.LN)
tumbled Friday after the U.K.-based firm posted a widened half-year
loss and both its revenue and outlook disappointed investors.
The London-based group, which mostly trades in North America,
said it is trading in line with its expectations and reiterated its
2016 guidance, adding that its goals to 2018 are unchanged. The
company has been roiled by challenging educational markets,
particularly in the U.S.
For the half year ended June 30 Pearson said it made a pretax
loss of 306 million pounds ($403 million), compared with a loss of
GBP132 million a year earlier. Sales on an adjusted basis fell 7%
year-over-year to GBP1.87 billion. Stripping out exceptional and
other one-off items, adjusted operating profit was GBP15 million
compared with GBP54 million.
It expects to report adjusted operating profit before
restructuring costs of between GBP580 million and GBP620 million in
2016. It also said if current exchange rates persist until the end
of 2016 the earnings per share guidance range will increase by
approximately 4 pence.
It recommended a dividend of 18 pence, unchanged from a year
earlier and in line with previous guidance, it said.
Pearson expects at least GBP800 million operating profit by
2018.
At 0856 GMT, shares were down 9.2% to 881 pence. Broker Liberum
said the sales decline was sharper than expected and raises the
prospects of a further profit warning this year.
Still, Jefferies analyst David Reynolds said while sales are
soft, benefits from the company's restructuring are expected to be
visible in the second half.
Write to Simon Zekaria at simon.zekaria@wsj.com
(END) Dow Jones Newswires
July 29, 2016 05:34 ET (09:34 GMT)
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