Pearson (PSO) shares traded lower Friday after the publishing group said it would launch a strategic review of its Wall Street English and Global Education businesses following a full-year pre-tax loss of £2.56 billion ($3.3 billion).
However, Pearson reported better-than-expected full-year revenues of £4.55 billion and adjusted operating profit of £635 million, despite persistent weakness in North America higher education market, where sales fell 10% year-on-year and adjusted profits plunged 28%. Pearson also issued a 2017 guidance range of £570 million to £630 million for operating profit, translating into adjusted earnings per share of between 48.5 pence and 55.5 pence.
"2016 was a challenging year for Pearson, but we remain the global leader in education, with a strong market position," said CEO John Fallon. "Our priorities for 2017 are clear. We will continue to accelerate our digital transformation, simplify our portfolio, control our costs, and focus our investment on the biggest growth opportunities in education."
Pearson shares fell nearly 2% to change hands at 634 pence each by 08:40 GMT, extending a three month decline past 20%
Pearson also initiated processes to explore a potential partnership for its English language learning business Wall Street English and a possible sale of its English test preparation business Global Education.
The company initiated the processes as the "reduce exposure to large scale direct delivery services and focus on more scalable online, virtual and blended services."
The processes are at an early stage and there is no certainty that they will lead to transactions.