* Publisher feels impact of lower U.S. freshman enrolments
* Says outlook strong in digital, services, emerging markets
(Adds details, shares, reaction)
LONDON Oct 30 British publisher Pearson
said it expected 2013 adjusted operating profit to be
lower than last year due to weaker demand for college textbooks
in its North American Education division, sending its shares
The group did, however, reiterate its full-year earnings
guidance - its key forward-looking metric - after reporting
nine-month underlying sales up 2 percent due to strong demand in
its professional and emerging markets divisions.
Analysts, who said the lower profit forecast had been
expected, described Wednesday's trading update as mixed but
said they did not expect to change their forecasts for the
education and media group, which owns the Financial Times
"While international education sales have accelerated, as
expected, there is a more negative tone on North American
education margins and the North American higher education
business, which is our chief area of structural concern,"
analysts at Liberum said in a note.
Pearson's shares were down 3.15 percent at 1322 pence by
1105 GMT after they hit a 12-year high in the run-up to the
Pearson has undergone a raft of management and structural
changes in the last year including the merger of its Penguin
books division with Random House, designed to increase its focus
on emerging markets and digital services.
The group said the operating profit would be lower due to
the weaker demand in its North American Education division and
accounting changes related to the books merger.
Education margins are expected to be lower than in 2012 due
to pressures in North American Education margins following lower
freshman enrolments and weak bookstore purchasing.
The group said underlying revenue was up 5 percent in its
international education unit, up 8 percent in its professional
education division and flat in North American Education.
"Market conditions remain strong in digital, services and
emerging markets, but are more challenging in some of our
largest textbook publishing markets," Chief Executive John
"This reinforces the importance of our strategy of
accelerated change, so that we can shift more capital and talent
more quickly towards these significant growth opportunities."
Overall, the group reiterated its full-year earnings
guidance for adjusted earnings per share to be broadly level
with last year, at 82.6 pence.
The group, which put its M&A-focused Mergermarket news
service up for sale in July, said the process to explore a sale
was progressing well.
(Reporting by Kate Holton; editing by Rhys Jones and Mark