Revenues in Penguin Group's North American operations fell 3.2% to $612.5 million in 1998, according to parent company Pearson's annual report. The decline was due mainly to loss of revenues from Troll Communications, which was sold in 1997. Penguin's best-performing subsidiary was its U.K. operations, in which sales rose 12.4% to nearly $181 million. Earlier this year, the company reported total sales of about $868 million (News, Mar. 15).

According to the report, Penguin hopes to boost sales in 1999 by "taking a more sophisticated approach to merchandising and marketing." The company noted that Penguin's Internet sales tripled last year and that it expects to start printing some of its backlist titles this year by using on-demand technology. Improved use of technology helped Penguin cut its return rate below 30% in the U.S. for the first time in many years.

Despite flat sales in its U.S. higher education group and a decline in revenues in the international division, Pearson Education reported a 28% gain in operating profit to $127 million, before the inclusion of results from Simon &Schuster; when S&S's results are added, operating profit rose 65% to $164 million.

The best performer in the year was Pearson's Addison Wesley Longman school division, which reported a 55% increase in profits to $46.5 million last year. Strong sales of both AWL's new math program and new electronic reading program led the growth. The school business also did well with new biology and foreign-language programs. Profits in the higher-education group rose 15% to $38 million, while international profits increased 18% to $43 million.

Pearson said that although the integration of AWL and S&S began several months later than hoped, the education group is still on track to deliver $130 million in cost savings by 2000.