Pearson wins new five-year U.S. education contract

LONDON (Reuters) - Educational publisher Pearson said on Monday it has been awarded a new five-year contract by the U.S. Department of Education to score the country's national test for measuring the progress of students.

Pearson has been responsible for scoring the National Assessment of Educational Progress, known commonly as the "Nation's Report Card", since 1989 and said it had won the new 2008-2012 contract along with a number of other partners.

The London-based company, which last week raised full-year sales forecasts within its education business, said as well as distributing materials, test processing and scoring it will also provide a secure online test delivery platform.

The NAEP is moving from paper-and-pencil testing to online testing and Pearson said from next year it will start field-testing online interactive computer tasks in science.

The move from written to online tests has put the spotlight on assets within the Pearson portfolio that focus on the former.

An unsourced report in the Sunday Times said Pearson Chief Executive Marjorie Scardino is looking for a buyer for a division within its education arm that makes image scanners that process school test papers by identifying pencil and ink marks.

Pearson officials declined to comment on the report.

Analysts estimate the unit could fetch around 100 million pounds ($206 million).

"Although the disposal is small, it is likely to be positive for sentiment and shows that management is being proactive in refocusing the portfolio," UBS analysts said in a research note.

Panmure Gordon media analyst Alex DeGroote said selling the scanners business could potentially be slightly earnings per share dilutive.

"More importantly, and given markets are now experiencing a rebound, the Pearson break-up/releverage story will gain credibility again on the back of disposals like this," he said.

At 1219 GMT, shares in Pearson were up 0.1 percent at 790-1/2 pence.

Pearson generates around two-thirds of its sales in the United States. Group sales in 2006 were 4.4 billion pounds.