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Pearson underwhelms again as US arm struggles

In December, John Fallon announced his intention to retire once a replacement as chief executive is appointed. 

Pearson PLC -
The core business saw decent growth

Pearson PLC (LON:PSON) was under pressure again as it warned revenues next year will be flat and profits will fall.

Sentiment was further turned by the announcement that finance head Coram Williams is leaving to be replaced by his deputy Sally Johnson.

On trading, the education group said sales in 2019 would be flat with lower sales in courseware in North America offsetting decent growth in its core business.

Profit will be in line with guidance of £590mln.

For 2020, Pearson expects the trends to continue with US coursework to fall sharply again, while the core business will grow in ‘low single-digits’.

Profits for the year are forecast at between £500-£580mln.

John Fallon, chief executive said: "We have secured flat revenue this year and delivered operating profit within the guidance range, with much weaker sales in US Higher Education Courseware offset by a strong performance in the broader 76% of Pearson.” 

In December, Fallon announced his intention to retire once a replacement as chief executive is appointed. 

That announcement followed the sale by Pearson of its remaining 25% stake in Penguin Random House for £530mln.

Pearson’s profits estimated for 2020 still includes a share from the publisher with the deal expected to complete in June.

Shares fell 10% to 557p.

Quick facts: Pearson PLC

Price: 528.2 GBX

Market: LSE
Market Cap: £3.98 billion

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