Pearson Shares Rise on Review of U.S. Unit, Cost Cuts -- Update
05 Mai 2017 - 1:05PM
Dow Jones News
By Rory Gallivan
LONDON-- Pearson PLC shares rose more than 10% Friday after the
world's largest education company said it may sell its U.S. school
courseware publishing business and will cut more jobs.
The London-listed provider of textbooks, language courses and
other educational products and services has been grappling with
falling sales, hurt by declining college enrollment and tough
competition in the U.S.
Weakness at the K12 courseware business in the U.S. was a major
reason for Pearson's 9% revenue fall in 2016 and its profit warning
in January that caused the company's share price to fall by about a
third.
Pearson said Friday it would launch a review of the K12
business. It also said it expects to make additional annual savings
of GBP300 million ($387 million) by the end of 2019 through
measures including cutting administrative costs in North
America.
"There will be job losses, but there will also be jobs created,"
Chief Executive John Fallon said, without giving details of how
many jobs will be lost.
Shares in Pearson were up 11% at 0915 GMT, giving it a market
capitalization of GBP6 billion.
Pearson announced 4,000 job cuts last year as part of a
restructuring to save GBP350 million a year. The company said it
would give more details of the latest cost-cut plans later this
year.
The measures announced Friday are the latest in a yearslong
restructuring process Pearson has undergone involving
multibillion-dollar asset sales amid tough market conditions in the
U.S. Those sales include the disposal of Pearson's Financial Times
newspaper arm two years ago,
Pearson also Friday reported an encouraging start to 2017, with
underlying sales in the usually quiet first quarter of 2017 up 6%
from last year.
Pearson said it benefited from growth in North American
higher-education products, professional certification, South
African school textbooks and U.K. student assessment.
Write to Rory Gallivan at rory.gallivan@wsj.com
(END) Dow Jones Newswires
May 05, 2017 06:50 ET (10:50 GMT)
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