Worsening conditions in Pearson Education's international and training markets as well as a drop in technology spending will lower profits in the group by about £35 million ($51 million) for 2001, Pearson chief executive Marjorie Scardino told analysts in a conference call last week. Sales and earnings at Penguin continue to be on plan, Scardino added, despite soft backlist sales and a weakness in illustrated reference and travel titles.
At Pearson Education, the major trouble spot is in the international segment, particularly Latin America, where deteriorating economic conditions have resulted in lower sales and profits. Corporate training results have been hurt by the attack on the World Trade Center, where FT Knowledge was located, as well as by slower spending on training by major companies. Revenues in Pearson's k 8 segment were up 9% through October, and revenues in the secondary school market were also up solidly, Scardino said. Revenues in the college segment were up 5% through October, and sales in testing and assessment increased by more than 15%.
Looking ahead to 2002, Scardino said she expects another good year from the college and testing segments, but slower growth in the school market, especially in the basal textbook area due to fewer state adoptions. Little improvement is forecast for the Latin American and corporate training businesses.
At Penguin, Scardino said that, while "we don't expect softness in backlist sales to pick up any time soon, two big things are going to help Penguin next year'' a strong publishing schedule that includes new books from Tom Clancy and Patricia Cornwell, and a return to profitability at Dorling Kindersley.
