Publisher Pearson reports worse-than-expected fall in sales

Pearson, the world's biggest education company, said first-half underlying sales fell more than expected, hurt by declines in assessment revenue in the United States and the UK, its two top markets.

Shares in the company fell as much as 4.6 per cent to 925.5 pence, making them the largest percentage losers on the FTSE 100 in early trading.

The company, which has issued a string of profit warnings as it struggles to cope with a downturn in its biggest markets, said underlying sales fell 7 per cent to £1.87 billion for the six months to June 30th. This was worse than a 5 per cent fall forecast by a company-provided analyst consensus.

US strife

Political and economic strife have combined to derail its plans to sell text books and mark exams in the United States, its biggest market.

In response, Pearson unveiled a restructuring programme and said it would cut 4,000 jobs, or more than 10 per cent of its work force. The company said on Friday about 3,450 employees had been notified of their exit.

Pearson said it remained on track to deliver its guidance for the full year, and added that currency exchange rates could boost its earnings-per-share guidance range by four pence if they stayed at their current levels.

The company's previous earnings expectations were between 50p and 55p for the year. – (Reuters)