Pearson PLC (LSE:PSON) shares jumped 5.8% to 1,144p in early trading after the education group kicked off 2026 in decent shape, reporting 4% underlying sales growth in the first quarter and saying performance came in line with expectations across the board.
The standout was Virtual Learning, which surged 21%, helped by strong enrolment growth and favourable funding timing. Enterprise Learning & Skills also performed well, up 8%, with vocational qualifications and partnerships, including a deal with Salesforce, driving the gains. Higher Education and English Language Learning both nudged up 2%.
The one soft spot was Assessment & Qualifications, which slipped 1% due to contract timing and the previously flagged loss of the New Jersey contract. Pearson says that should turn around from the second quarter.
Chief executive Omar Abbosh struck a confident tone, saying the company is "executing with discipline" and making progress on its strategy, including new AI products such as a Communication Coach integrated into Microsoft 365, a student assessment contract win in Wyoming, and a raft of new AI-focused courses and certifications.
On the financial side, Pearson looks in good health. The company confirmed it remains on track to deliver mid-single digit underlying sales growth for the full year, with adjusted operating profit expected between £640 million and £685 million. Free cash flow conversion is guided at 90% to 100%.
The £350 million share buyback is moving along, with £219 million completed at an average price of 964p by the end of March. Pearson also raised £350 million through a 10-year bond in April, leaving it with low leverage and solid liquidity heading into the rest of the year.
AJ Bell's Russ Mould commented that Pearson's shares were boosted by "a resilient set of results and a confident tone sounded by chief executive Omar Abbosh, which suggested the company can benefit rather than being disrupted by AI."
-- Updated with share price movement, analyst comment --