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Shares in education publisher Pearson (LON:PSON) dived in London as earnings expectations were slashed on weaker US college enrolments.
In the third quarter sales dropped 5% on a constant currency basis, and are 2% down on the year so far with falling sales of textbooks in South Africa also a problem.
John Fallon, chief executive, said: “The key cyclical and policy-related factors which have been hurting our markets for some years have yet to improve.”
He added the company is gaining market share in many areas and controlling costs as it invests in new products.
Earlier this quarter, Pearson agreed the sale of the Financial Times and its 50% stake in the Economist.
Before its sale, the FT reached a record paid circulation of 747,000, an increase of 10% year on year, with digital subscriptions up 16% year on year to almost 535,000, Pearson said.
Adjusting for that disposal, Pearson revised its earnings expectations to 70p-75p from 80p-75p, but as a result of the weaker third quarter earnings will be at the bottom end of guidance.
Broker Investec described the update as “poor” adding that the lower estimate “is a new painful negative as we thought things had bottomed”.
Shares fell 180p, or 15%, to 1,008p.