Disclaimer: My favorite news source is The Financial Times, which is owned by Pearson
Tom Clancy approved
Pearson is an international media and education powerhouse and publishes in the education, business, and consumer markets. If you've ever read Tom Clancy, Nora Roberts, John Steinbeck, or a host of other well-known authors, you've read a Penguin book. Penguin is a Pearson holding.
But 68% of Pearson's sales come from the education side of the business, and the company's revenue in that space is the highest in its peer group, a space that includes industry stalwarts McGraw-Hill
Not your father's publishing company
Second-half results for 2011 paint a growing and profitable picture for Pearson:
- Total sales are up a healthy 6%.
- Total profits were up a more-than-healthy 20%.
- FT Group sales, which operates Pearson's business publications, are up 7%, with profits up 10%.
Penguin's sales are 4% lower, but profits have stayed steady because of rapid digital growth. Dame Marjorie Scardino, Pearson's chief executive, recently told The Financial Times that the company was "well placed to exploit accelerating structural changes in its industries, such as the move to digital delivery of content." Walking the digital talk:
- Pearson's digital education platform and service registrations are up 15%.
- FT.com subscriptions are up more than 30%, which is extra impressive considering there's a pay wall.
- Penguin e-book revenue is up almost 130%.
And developing markets -- including Africa, Middle East, Asia, and Latin America -- are another bright spot for Pearson, with total sales for all areas up 40%.
There's nothing to fear but un-Foolish fears
Pearson is currently trading for slightly less than $18, with a very attractive P/E of just 7.3. Peer Scholastic
Investors have steered clear of traditional publishing companies lately, fearing they weren't making the necessary adjustments to stay competitive in the digital age. Pearson is not one of these companies. It's forward-thinking, forward-moving, and worthy of a closer look by the investment community.
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