Pearson reports profits slump
Pearson, the publisher of the Financial Times newspaper, predicts 2013 operating profit to be broadly level with 2012.
Pearson, the publisher of the Financial Times newspaper, predicted 2013 operating profit broadly level with 2012, when earnings fell as print publishing businesses remained under pressure.
Adjusted operating profit fell to #936 million pounds ( €1.07 billion) in 2012 from #942 million a year earlier, London- based Pearson said in a statement today.
The company reported adjusted earnings per share of 84.2 pence, matching the average estimate of analysts.
Sales rose 4.3 per cent to #6.11 billion, missing a #6.18 billion average estimate.
Pearson said it will have about #150 million of restructuring costs in 2013 as it speeds up the shift of its education business to fast-growing economies and digital activities and separates its Penguin book business in preparation to merge it with Bertelsmann AG's Random House.
The restructuring will generate about #100 million of annual cost savings in 2014.
"The outlook is likely to be taken very negatively," Ian Whittaker, an analyst at Liberum Capital, said in a note.
"There are also significant restructuring charges." Pearson fell as much as 5.4 per cent, the biggest intraday drop since July. The stock was down 2.6 per cent at 1,185 pence at 8.15am in London trading.
"Trading conditions are tough and structural changes mean many of our traditional publishing activities are under pressure," chief executive officer John Fallon, who took over as chief in January, said in today's statement.
The restructuring will "strengthen dramatically" Pearson's digital education services, he said.