LONDON -- Pearson (LSE: PSON.L ) , the publishing giant behind Pearson Education, the Financial Times Group, and Penguin books, reported first-half sales up 6% to 2.6 billion pounds this morning. But a slump in operating profits -- nearly 10% lower at 188 million pounds -- has pushed its share price down 5% so far today.
Penguin's operating profits were substantially down -- 48% lower than in 2011 at 22 million pounds -- with Pearson blaming the "exceptional performance of competitor bestsellers Fifty Shades of Grey and The Hunger Games," as well as generally tough conditions for physical book publishing and retailing.
Meanwhile, operating profits within the professional education division were down a whopping 65% to just 9 million pounds, versus 27 million pounds in 2011. The fall was attributed to changes in funding criteria relating to IT apprenticeships.
The FT Group's profits were depressed 10 million pounds by the sale of FTSE International, although the continuing businesses -- the Financial Times, Mergermarket, and The Economist Group -- returned broadly level results.
There was better news from the group's North American education division, where operating profit was up 35% at 62 million pounds. Operating profit was up 16% to 73 million pounds at the international education division. Pearson anticipated continued growth in both areas, despite the effect of economic weakness on education spending.
Marjorie Scardino, chief executive, said:
We began 2012 planning for a challenging external environment and our caution was well-placed: conditions have been tough in the early part of this year and, for a couple of parts of Pearson, tougher than expected. But that's precisely when our planning for structural change and our investments in growth markets show their power.
We've kept up the pace of transformation, and continued our shift towards digital and services businesses, which this year for the first time will yield the majority of Pearson's revenues.
Given the challenging economic conditions that seem set to prevail for the foreseeable future, the outlook for Pearson may be uncertain. But one expert investor does have a record of success through good times and bad.
Indeed, ace stock-picker Neil Woodford has delivered an impressive 347% total return during the 15 years to Dec. 31, 2011. What's more, you can discover the shares he now holds -- and which losers he's avoided -- within "8 Shares Held By Britain's Super Investor." You can download this free Fool report today, but hurry -- it's available for a limited time only.
Are you looking to profit from this uncertain economy? "10 Steps To Making A Million In The Market" is the very latest Motley Fool guide to help Britain invest. Better. We urge you to read the report today -- it's free.
Further Motley Fool investment opportunities: