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Pearson PLC (PSON.LN) Friday warned that its first-half operating profit will be lower than last year, blaming several factors, including restructuring and the disposal of its stake in FTSE International as the publisher reported a rise in first-quarter revenue.
Still, the U.K.-based company, which publishes the Financial Times newspaper and Penguin books, expects full-year sales and operating profits to grow as forecast.
At constant currencies, a key figure tracked by U.K. analysts, revenue rose 11% to GBP1.16 billion in the three months ended March 31. Total revenue was up 12% over the same period. The company didn't release profit figures or specific forecasts for 2012.
The first quarter is traditionally a quiet one for Pearson because its education materials are generally bought in the third quarter in time for the start of the academic year in the Northern Hemisphere. The fourth quarter is also important as it's the Christmas shopping season for Penguin books.
Pearson is dominated by its large North American education division--all of which have been under pressure from the rise in digital media, from schools using ebooks and online learning, to commuters reading their favourite book on tablet computers.
Pearson said its education business, which accounts for more than 60% of Pearson's earnings and sales, "made a good start to the year."
"Though the U.S. education market remains generally weak, we continue to benefit from our strong position and the rapid growth in our digital and services businesses," Pearson said in its trading statement ahead of its annual shareholder meeting in London later Friday.
Pearson said its International Education business is "growing well", particularly in developing markets. The division has also been helped by recent acquisitions and investment.
In the education sector, Pearson competes against Cengage Learning, Houghton Mifflin Harcourt, Benesse Education, and McGraw-Hill Cos (MHP).
In February, Pearson said it expects to increase sales and profits in 2012, despite a tough economic environment. Digital revenue is expected to overtake revenue from its traditional publishing operations this year, but it stopped short of providing specific figures.
Pearson shares closed at 1150 pence Thursday, valuing the company at GBP9.38 billion.
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; email@example.com