Pearson 9-Month Underlying Sales Down; Backs 2016, 2018 Outlook - Quick Facts

(RTTNews) - British publishing and education company Pearson plc (PSO, PSON.L) Monday reported that sales for the nine months declined 7% in underlying terms, and was down 3% in headline terms.

The weak underlying sales reflected the expected declines in assessment revenues in the US and UK, as well as North American Higher Education courseware due to a further inventory correction by retailers in July and August. The company said the trends started improving from September, and have continued into October.

Further, the company said it has reiterated its 2016 guidance and its 2018 goals are unchanged.

In 2016, the company continues to expect to report adjusted operating profit between 580 million pounds and 620 million pounds, and adjusted earnings per share before the costs of restructuring between 50 pence and 55 pence.

Sales are trending lower than expectations in North American Higher Education courseware business, but a tight focus on discretionary costs means cost base is also lower than expected.

If current exchange rates persist until the end of 2016, the earnings per share guidance range will increase by approximately 4.5 pence to 54.5-59.5p. The company previously expected earnings per share guidance range toincrease by approximately 4 pence.

Further, for fiscal 2018, the company continues to expect adjusted operating profit to be at or above 800 million pounds, with the full benefits of simplification programme, and the launch of new products.It is also expected that by the end of 2017, stability would return to US college enrolments, retail inventory levels and the UK qualifications market.

Pearson's chief executive John Fallon said, "While market conditions continue to be challenging, particularly in higher education, thanks to tight cost management we are on track to deliver our guidance this year, and to achieve our long term growth goal."