18 Dec 2001 | The Media Leader Staff

Pearson Warns On Profits Seeing ‘No Material Recovery’ In Ad Market

Pearson, owner of the Financial Times, has this morning issued its second profits warning in two months (see Pearson Warns That FT Profits May Fall By 40%). The company said that profits from its education operations could be as much as $51 million lower than expected due to a slowdown in the Latin American market and a fall in corporate training demand at FT Knowledge.

Profits at FT Group are expected to fall by 40% on last year and Pearson says it has seen ‘no material recovery’ in advertising revenues across its business titles. Ad revenue for the first quarter of next year is expected to fall significantly below the same period in 2001 although Pearson claims that the measures put in place during the course of this year will benefit its business titles.

Looking ahead, Pearson says it does not expect any substantial upturn in advertising and technology markets in 2002 and is preparing its businesses accordingly although states that cuts made in 2001 “should help us to deliver a significant increase in adjusted earnings per share in 2002.”

Marjorie Scardino, chief executive at Pearson, 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.”

Shares in Pearson rose this morning to a high of 787Â˝p before dropping to 768p at 10.30am.