Pearson profit exceeds estimates

Pearson Plc, the publisher of the Financial Times newspaper, reported 2007 profit that surpassed analyst estimates as the company expanded its education business and sold some assets.

Earnings per share excluding exceptional items and amortization climbed to 46.7 pence from 43.1 pence a year earlier, the London-based company said yesterday. That topped the median estimate for 44.7 pence from 23 analysts surveyed by Bloomberg. Sales rose 4.3 percent to 4.16 billion pounds.

"We continue to reshape Pearson into a more digital, more international and more efficient company," Chief Executive Officer Marjorie Scardino said in the statement. "Those changes make us confident that 2008 will be another good year."

Pearson has been selling assets such as foreign-language newspapers to focus on the Financial Times and its education business, which publishes textbooks and provides testing for nurses, business-school students and stockbrokers. Last year, Pearson bought online course company eCollege.com for $538 million and sold its French newspaper Les Echos for 240 million euros to LVMH Moet Hennessy Louis Vuitton SA.

Net income dropped to 284 million pounds from 446 million pounds a year earlier, because of a tax charge stemming from the sale of its Government Solutions unit. When the sale was announced in 2006, Pearson recorded a tax credit, which was reversed on completion of the disposal in 2007.

Education, Pearson's largest business, will record "another year of good profit growth", Pearson said.

Moving products online improved profitability by cutting printing and shipping costs while increasing revenue from institutions trying to save money and better monitor students.

Pearson's Penguin unit, the publisher of Alan Greenspan's memoirs, will improve margins further, pushing them "into double digits", the company said. The unit's "good publishing and trading performance has continued into the early part of 2008".

The Financial Times Group will also "continue its profit growth" as the unit has substantially increased its digital and subscription revenues and reduced its reliance on print advertising, Pearson said.

Scardino has spent more than $8.8 billion buying education assets since 1997, including Simon & Schuster textbooks and Harcourt Education's international business. She sold Madame Tussaud's waxwork museum and a stake in television broadcaster British Sky Broadcasting Group Plc, and agreed last month to sell Pearson's 50 percent stake in the German-language version of the Financial Times.

Agencies

(China Daily 03/04/2008 page16)