Pearson plc Suffers Weak Trading And Financial Performance

The shares of Pearson (LSE: PSON) (NYSE: PSO.US) took a hit this morning after the media and education company reported weak results. Pearson lost 8% and trades at 1,195p currently.

The FTSE 100 member, which offers services such as test creation and teacher development, endured a particularly tough spell in the US market, where it generates approximately 60% of its sales.

Performance in emerging markets was stronger which helped to offset weak textbook sales in developed markets.

Operating profit amounted to £865 million before restructuring charges. Primarily this was due to the accounting impact of merging of its Penguin division with Random House, with the hope of becoming the world leader in publishing.

John Fallon, the chief executive, said:

Pearson made good progress on our strategic goals in 2013 but our trading and financial performance has been weaker than expected, particularly in North America.  With trading conditions still challenging in 2014, this further underlines the importance of the work we started in 2013 to reduce our established cost base and redirect our investment towards our biggest future growth opportunities.

After the announcement that net restructuring costs will total £130m earnings per share should be readjusted to 70p with a dividend of 16p.

Following this morning’s price movement shares trade at 17 times earnings, and offer a prospective dividend yield of 1.3%.

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> Mark does not own shares in Pearson.