Early morning confusion over the boost in profits at Pearson, the information and education group that publishes the Financial Times, sent the stock on a roller-coaster yesterday.
Reading the headline profit figure of £297.8m, many investors apparently did not realise it included a not-to-be-repeated profit of £57.6m from BSkyB, the broadcaster floated last year in which Pearson now holds 14 per cent, or that it masked disappointing results from the company's interactive media subsidiary, Mindscape.
The shares shot up to 596p, before dropping back to close at 569p, 15p off on the day.
Some analysts marked down their estimates for 1995, as concern about Pearson's move into interactive media resurfaced. The company had been accused of overpaying for the US-based video game and CD-ROM company, just as the market for game cartridges, for which Mindscape produces software, began to decline.
The $462m (£312m) purchase in May 1994 gave Pearson a stake in new media, through a company with proven research and development capabilities but operating in a difficult market.
Mindscape contributed only £3.5m to operating profits, below company expectations. Frank Barlow, Pearson's chief executive, said he did not regret buying the company.
"In the medium and long term, this is an exciting, even explosive sector, and we should be in it," Lord Blakenham, Pearson's chairman, said.
Overall, operating profits were up 26 per cent to £272.4m, reflecting growth from continuing operations and before taking into account the BSkyB contribution.
Newspaper publishing, under pressure in the UK as a result of the circulation price war and the rising cost of newsprint, turned in solid results, led by firmer profits from the Financial Times and Recoletos, the Spanish newspaper book in which Pearson took a controlling interest in 1994.
Mr Barlow said the newsprint shortage had not caused the company any problems to date, but , in a reference to other newspaper publishers such as News International which have cut pages and print runs, said that the shortage might lead to "the demise" of at least one national title.
Professional publishing, stitched together out of Longman and Financial Times assets, had a modest 11 per cent rise in operating profits but educational publishing in the US, was hit by lower sales to college students.
The company's entertainment holdings, including the Alton Towers theme park and Madame Tussauds, performed well, while Penguin Books, celebrating its 60th anniversary this year, saw operating profits climb by 16 per cent to £40m.
Thames Television, its independent production company, reported operating profits of £19m, compared with £6.5m a year earlier, although Pearson Televisionhad start-up losses of £7.4m.Reuse content