International media group, Pearson, will see a near 20% increase in earnings in 2005, according to analysts Merrill Lynch.
Yesterday Pearson issued a positive trading statement (see
Financial Times Will Break Even For 2004), stating that the company has experienced a larger than expected growth for its Higher Education Business Group, growing ahead of the industry for the sixth year running.
Pearson-owned Penguin books, looks set to suffer during 2005 falling by 34% year on year to £60 million profit, however, Merrill Lynch has forecast higher profits towards the end of the year, rising to £69 million.
This week has also seen the Penguin division reject demands from some of Britain’s best known authors for compensation, following the failure of the computer system at the new Penguin warehouse, leaving the distribution of books in chaos.
Overall however, Merrill has predicted a optimistic 2005 for Pearson, with an increase in earnings estimated to reach almost 20%. The analysts equate this upturn to a recovery in financial advertising, growing by 6% and shared service initiative, which is predicted to start delivering the £20 million of cost savings targeted for this year.
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