Pearson rules out sale of FT
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LONDON, England (Reuters) -- Publisher Pearson forecast underlying earnings growth this year and ruled out a sale of its flagship Financial Times newspaper as it posted a 2.8 percent rise in 2003 profit on Monday, meeting forecasts.
Pearson, which also publishes textbooks and owns Penguin books, said advertising trends at its business newspapers continued to improve in January and February as the advertising industry emerges from one of the deepest slumps in its history.
It posted a pre-tax profit of £410 million ($765 million) in 2003, on turnover down six percent to £4.05 billion. A Reuters poll of 17 analysts found median forecasts of £416 million profit and £4.02 billion revenues.
"In 2004 we expect to make further underlying progress toward our financial goals, and in 2005 we see a very strong performance from our whole company. That will be underpinned by U.S. school publishing and contracts we already have in-house,'' Chief Executive Marjorie Scardino said in a statement.
The 2004 outlook was in line with that delivered in February by rival Anglo-Dutch publisher Reed Elsevier, which said challenging market conditions would continue.
Pearson shares, which have underperformed the media sector by 19 percent over the past 12 months, opened a little firmer but by 0938 GMT stood 0.4 percent lower at 617-1/2 pence, valuing the company at around five billion pounds.
Pearson said advertising revenues at the FT, which were 18 percent lower in the first half of 2003 and 12 percent lower in the second half, are 4 percent lower in the year to date.
"Forward bookings are running a little ahead of last year at all our business newspapers.''
But finance director Rona Fairhead told reporters it was too early to call the turn in business advertising, although she did expect business ad revenues would return to their former peaks at some stage in coming years. "We enter 2004 leaner and stronger with the prospect of accelerated performance in 2005.''
Fairhead also said there was no intention of selling the FT where operating losses grew to £32 million from £23 million in 2002.
"There are a lot of good reasons (to keep the FT). We have a whole group of business newspapers worldwide. We benefit from having that breadth. We have terrific brands and we know how to manage brands.''
Despite the constant denials, there has been some media speculation that the loss-making FT may no longer be regarded as core in Pearson's operations.
Pearson forecast its U.S. higher education business would grow between four and six percent in 2004, "gaining share with a strong publishing schedule, our online services and custom publishing.''
The dividend was raised 3.4 percent to 24.2 pence.
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