UPDATE 2-Pearson raises guidance on lower charges
* Pearson raises 2011 EPS guidance to 83p from 80p on lower charges
* Trading in line with expectations
* Shares flat
By Georgina Prodhan
LONDON, Nov 3 (Reuters) - British publishing group Pearson raised its full-year earnings guidance by 4 percent on lower-than-expected interest and tax charges and said on Thursday it was confident in its outlook despite weakness in its key U.S. textbook market.
The owner of the world's largest education business, the Financial Times and Penguin Books said it expected adjusted earnings per share of about 83 pence ($1.33) per share, up from its previous guidance of 80 pence.
"We can't count on the trading environment to get any easier any time soon, but we do expect our durability and our innovation to continue to help us succeed," Chief Executive Marjorie Scardino said in a statement.
Pearson said its investments in education technology and developing markets had enabled its education business to grow 7 percent, with a 1 percent rise in its North American Education division, which accounts for nearly half of group sales.
The overall markets for U.S. school and college textbooks declined by 11 percent and 2 percent respectively as states cut public spending, Pearson said. Rival McGraw-Hill's education division sales fell 11 percent in the third quarter.
Shares in Pearson, which have strongly outperformed the wider market this year so far, were flat in early trading, while the European media sector was down 0.5 percent.
"The upgrade to guidance should obviously be taken well. But our concerns very much remain: the North American education market is undergoing rapid structural change," Liberum Capital media analyst Ian Whittaker wrote in a note.
"While we do not doubt Pearson's strong management and strategic moves, the share price outperformance vs. the sector and FTSE (close to 20 percent) means there is little room for disappointment," he wrote, keeping his "hold" recommendation.
Sales at the FT Group rose 7 percent in the first nine months of the year, as digital subscriptions smoothed out advertising volatility.
Penguin sales were flat -- with a line-up of authors including Patricia Cornwell and Jamie Oliver expected to boost Christmas sales.
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