Education company Pearson PLC (GB:PSON) reported lower revenue and profits for the first half of the year. Nonetheless, the company confirmed its guidance for 2024 and 2025. For 2024, the company expects organic revenue growth of 3.7% and adjusted operating profit of £621 million at constant exchange rates. Following the results, Pearson shares were down by around 4% in early trading hours but recovered later during the day. At the time of writing, PSON stock gained 0.24%.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Pearson PLC is a publishing company that offers educational solutions, courses, and digital content in around 200 countries worldwide.
Highlights from Pearson’s Interim Results
For the first half, Pearson’s pretax profit dropped to £212 million, down from £236 million in the same period last year. Meanwhile, sales reached £1.75 billion, marking a decline from £1.88 billion a year ago.
On the plus side, Pearson’s underlying adjusted operating profit increased by 4% to £250 million, with the adjusted profit margin rising to 14% from 13% the previous year.
Among its businesses, the company’s sales in English Language Learning increased by 11%. This was mainly driven by strong growth in its Institutional business and the language learning solution, Mondly. However, the momentum in the English Language Learning business was partially offset by a sales decline in PTE (Pearson test of English) due to market dynamics.
Meanwhile, Workforce Skills sales experienced 6% growth, while the Assessment & Qualifications business grew by 2%. On the other hand, sales from Higher Education and Virtual Learning businesses fell by 2% and 1%, respectively.
Additionally, Pearson announced an interim dividend of 7.4p per share, marking an increase of 6% over the previous year. During the period, the company completed a share buyback worth £500 million. However, Pearson has paused any further buybacks for now.
The company also revealed that it aims to drive growth and efficiencies across all five of its core businesses, which is expected to result in restructuring costs.
Is Pearson Stock a Good Buy?
Overall, analysts are moderately bullish on PSON stock based on four Buy and two Hold recommendations. The Pearson share price forecast is 1,114.50p, which is 5.7% higher than the current level.
