Pearson First-Half Loss Narrows From a Year Earlier

By Simon Thiel and Kristen Schweizer

July 28 (Bloomberg) -- Pearson Plc, the publisher of the Financial Times newspaper, said its first-half loss narrowed from a year earlier as sales rose and the company recorded a smaller deficit from discontinued operations.

The loss for the period was 62 million pounds ($123 million), from a loss of 104 million pounds a year earlier, the London-based company said in an e-mailed statement today. Pretax profit rose 57 percent to 55 million pounds while sales climbed 16 percent to 1.97 billion pounds.

Pearson, which has most of its sales in the second half because of the ``seasonal phasing'' of the company's education and consumer book business, predicted further growth this year.

``In spite of the macroeconomic conditions, we are on track to make further progress on our financial goals and our strong trading performance has increased our confidence in the full-year outlook,'' according to the statement.

Chief Executive Officer Marjorie Scardino has sold assets such as foreign-language newspapers to focus on the Financial Times and its education business, which publishes textbooks and provides testing for nurses, business-school students and stockbrokers. Last year, Pearson bought online course company eCollege.com for $538 million and sold its French newspaper Les Echos for 240 million euros to LVMH Moet Hennessy Louis Vuitton SA.

The median estimate by four analysts in a Bloomberg survey was for pretax profit of 54.2 million pounds in the first half, while five analysts had a median estimate for sales of 1.84 billion pounds. The company raised its interim dividend 6.3 percent to 11.8 pence a share.

`Good Start'

On April 25, Pearson said it had a ``good start'' to 2008, helped by advertising revenue and educational publishing. The company also said at the time it was ``seeing healthy demand for instructional materials and educational services and our businesses are performing well competitively.''

North America accounts for about two thirds of Pearson's sales, and the collapse in the U.S. housing market is rippling through the economy. Investors are growing concerned that U.S. states will cut their spending on textbooks as their finances worsen, analysts said.

Pearson has spent more than $8.8 billion buying education assets since 1997, including Simon & Schuster textbooks and Harcourt Education's international business. She sold Madame Tussaud's waxwork museum and a stake in television broadcaster British Sky Broadcasting Group Plc, and agreed in February to sell Pearson's 50 percent stake in the German-language version of the Financial Times.

Bloomberg LP, the owner of Bloomberg News, competes with Pearson in providing information to the financial industry.

To contact the reporter on this story: Simon Thiel in London at sthiel1@bloomberg.net and Kristen Schweizer in London at kschweizer1@bloomberg.net;