LONDON – Pearson PLC shares rose more than 10% Friday after the world's largest education company said it may sell its U.S. school courseware publishing business and will cut more jobs.
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The London-listed provider of textbooks, language courses and other educational products and services has been grappling with falling sales, hurt by declining college enrollment and tough competition in the U.S.
Weakness at the K12 courseware business in the U.S. was a major reason for Pearson's 9% revenue fall in 2016 and its profit warning in January that caused the company's share price to fall by about a third.
Pearson said Friday it would launch a review of the K12 business. It also said it expects to make additional annual savings of GBP300 million ($387 million) by the end of 2019 through measures including cutting administrative costs in North America.
"There will be job losses, but there will also be jobs created," Chief Executive John Fallon said, without giving details of how many jobs will be lost.
Shares in Pearson were up 11% at 0915 GMT, giving it a market capitalization of GBP6 billion.
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Pearson announced 4,000 job cuts last year as part of a restructuring to save GBP350 million a year. The company said it would give more details of the latest cost-cut plans later this year.
The measures announced Friday are the latest in a yearslong restructuring process Pearson has undergone involving multibillion-dollar asset sales amid tough market conditions in the U.S. Those sales include the disposal of Pearson's Financial Times newspaper arm two years ago,
Pearson also Friday reported an encouraging start to 2017, with underlying sales in the usually quiet first quarter of 2017 up 6% from last year.
Pearson said it benefited from growth in North American higher-education products, professional certification, South African school textbooks and U.K. student assessment.
Also Friday, Pearson faced a revolt against its executive remuneration policy, with around 66% of votes going against the company's annual remuneration report. Mr. Fallon received a 20% pay rise for 2016, taking his total pay to GBP1.5 million. Shares in the company have fallen by around 40% since he became chief executive in 2013.
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(END) Dow Jones Newswires
May 06, 2017 02:47 ET (06:47 GMT)