Pearson sees no advertising recovery
LONDON - Shares in Pearson, owner of the Financial Times, fell almost 3% today as the group said advertising revenues in the first quarter of next year are expected to be lower.
Pearson said it saw no material recovery from the advertising downturn, but the company does expect all businesses to benefit from the steps the company has taken to reduce costs.
The forecast came as the group reported its December trading statement, which revealed that the FT Group is trading in line with reduced forecasts after a series of cost-cutting measures were introduced to help the company through the advertising slowdown.
In October, the company reported that it expects full-year profits at the FT Group to be down 40%. It also cut 14% of staff, from 1,050 to 900, in an effort to reduce spending at its internet businesses and technology and advertising operations.
This morning, Pearson shares fell 2.98% to to 782p in early trading, after closing at 806p last night.
The company said that trading conditions in Latin America were having a negative impact on the company's business there. However, the company expects substantial growth at its US educational publishing operations.
Pearson owns a 22% stake in European broadcaster RTL, which recently said it expects earnings before interest, tax, depreciation and amortisation to be down 35%-40% on 2000's pro-forma level of £343.8m as a result of worsening trading conditions across Europe.
Pearson chief executive Marjorie Scardino said: "The markets for advertising and technology continue to be tough, compounded by problems in Latin America. We can't say when these markets will recover, but with our cost base significantly lower, we're putting our business in the best possible shape for the year ahead."
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