Pearson says FT profits to fall by 40%
LONDON - Pearson, publisher of the Financial Times, is predicting that profits at its FT Group will be 40% lower than last year.
Pearson took the step of releasing figures today for the first nine months of trading because of what it called "an exceptional downturn in advertising in the last three weeks of September".
In a trading statement, it warned that as well as the FT Group's predicted fall in full-year profits, the advertising slowdown could affect its technology division profits to the tune of £25m below expectations at the half year.
Sales at the Financial Times are down 40%, and international publications Les Echos, FT Deutschland, as well as The Economist, were down significantly, Pearson said.
The Penguin Group, the book publishing giant, was also suffering but still recorded growth of 11% over the first nine months of the year.
Marjorie Scardino, chief executive of Pearson, said, "We are now expecting profits to be significantly below our original plans for the year, almost entirely because of the weakness in advertising markets and, to a lesser extent, the technology recession."
She did sound a brighter note, adding, "These markets are cyclical in character and will bounce back. When they do, we will see the benefit."
Although there were no detailed job cuts
announced, the company, which has already said it is to cut back its £150m online spending, is likely to cut staff at its FT online operations.
It will also announce that it will buy the stake it does not own in FTmarketwatch.com from partner Marketwatch.com, a unit of the Viacom-owned CBS.
In April, Pearson cut 10% of staff at FT.com and other online publications in a bid to make the division profitable.
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