Pearson Warns of Lower Profit, Dividends on Weak U.S. Trading
January 18 2017 - 3:36AM
Dow Jones News
By Ian Walker
LONDON--Educational publishing firm Pearson PLC (PSON.LN) warned
on Wednesday of lower future dividends ahead of likely
less-than-expected operating profit next year, blaming poor trading
in North America, but vowed to accelerate its push into digital
publishing.
Pearson, a U.S.-focused specialist publisher which has undergone
a prolonged bout of restructuring including multibillion-dollar
asset sales, also said it will exit its Penguin Random House
book-publishing joint venture with Bertelsmann SE, the German
publishing giant. Pearson said it could put its 47% stake up for
sale.
Pearson said it did meet its operating profit target for 2016,
despite what it called an unprecedented decline in demand in North
America educational publishing market in the fourth quarter.
In announcing preliminary earnings figures, Pearson said it
expects to report adjusted operating profit of 630 million pounds
($777.1 million) in 2016, and adjusted earnings a share of 57
pence. Revenue fell 8% in the year to end-December in underlying
terms, mainly due to the weakness in demand for North American
higher-education courseware, it said. Adjusted figures strip out
exceptional and other one-off items.
Net revenue in the North American higher-education courseware
segment revenue fell 30% during the final quarter of 2016, leading
to a 18% decline for the full year. The company said it expects the
downward trend will continue.
For 2017, Pearson expects to report adjusted earnings a share of
48.5 pence to 55.5 pence on operating profit of GBP570 million to
GBP630 million.
Pearson said it plans to recommend a final dividend of 34 pence
for 2016, making a total payout for the year of 52p. From 2017, it
plans to rebase the dividend to reflect the difficult trading
conditions.
-Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
January 18, 2017 03:21 ET (08:21 GMT)
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