(The Times, January 19, 2010) Pearson, the publisher of the Financial Times and of Penguin books, today edged up its forecast for full-year earnings and said it had seen signs of a long-awaited recovery at its three most recession-hit businesses.
 
Marjorie Scardino, chief executive, said the 10 per cent rise in its expected earnings per share - before one-off items - from 61p to 63p per share, was helped by a combination of growing profits in its higher education text book, education software and testing business and the strength of the US dollar against sterling.
 
The group's bugbears have been falling orders for text books for American schools, hit by state education budget cuts, falling advertising revenues at the FT and weak Penguin book sales.
 
But Ms Scardino said that in the last quarter of the financial year to the end of February, "the rate of decline in advertising revenues began to slow, Penguin had a strong holiday season; and we saw a modest improvement in the US school publishing market."
 
She said: "We're heartened by our performance in the face of the economic downturn, and emboldened by the accelerating worldwide take-up of our brand of personal and digital learning.
 
"We are not counting on any help from the global economy this year, but we still see significant long-term growth opportunities and we are pressing ahead with this successful strategy."
 
School book sales in the US were weak, as expected, but Peason said its international education business, outside America, would see good profit growth, helped by growing demand for higher education and testing services.
 
The Financial Times Group, which includes subscription-only trade magazines, performed better than Pearson expected, as subscriptions remained resilient and a drop in FT advertising (down 14 per cent in the first nine months of the year) eased in the fourth quarter.
 
The group is under pressure to sell the Financial Times when advertising demand fully recovers, since it is exposed far more than text book publishing to the ups and downs of the economy.
 
Last week it effectively put its 61 per cent stake in Interactive Data (IDC), a profitable business providing financial information for US investment funds, up for sale by announcing a strategic review. IDC's Nasdaq stock market listing puts its current worth at about £1 billion. Interested buyers are likely to include Bloomberg and Thomson Reuters.
 
By Robert Lindsay