Upbeat Pearson bucks media trend

PEARSON, the Financial Times-to-Baywatch group, yesterday bucked the gloomy trend in the media sector with an upbeat trading statement.

Shares in the company soared more than 4.5 per cent to pounds 11.10 after it reassured the City that it had not been hit by the problems plaguing some of its competitors and reiterated its target of double-digit earnings growth.

In its annual update, Pearson, which owns Penguin books and the recently- acquired US publisher Simon & Schuster, said that trading in the second half of the year was "in line with expectations".

Revenues and operating profits continued to grow during the period despite a multimillion pound investment in the Financial Times and the strength of sterling, the company said.

The announcement was greeted with relief by City analysts, who said they would retain their full-year profit forecast of around pounds 350m. Industry experts had braced themselves for a bearish update following recent downbeat statements from a number of Pearson's rivals. Several publishing companies have been hit by a fall in advertising rates caused by the global economic slowdown.

Earlier this month, the Anglo-Dutch publishing giant Reed Elsevier issued a profit warning, while only last week the TV and newspaper group United News & Media predicted that earnings would fall short of market estimates.

"Pearson put out a robust statement. There was some nervousness around given that a number of rivals had said that everything was disastrous," said Louise Barton at Henderson Crosthwaite.

She added that Pearson had benefited from the radical restructuring and tight cost controls introduced by the chief executive Marjorie Scardino.

The company said that, despite a worsening economic climate, it had become less dependent on advertising revenues and "better placed to grow revenues and profits in these uncertain times".