Pearson Plc, the education publisher, dropped 14% after it said earnings would be at the low end of their expected range due to weakness in sales to U.S. universities.
The London-based company had set 2019 guidance for adjusted operating profit of 590 million ($729 million) to 640 million pounds, and the caution reflects shrinkage in U.S. Higher Education Courseware, a unit which makes up a quarter of Pearson revenue, the company said Thursday. The shares fell the most since January 2017, and traded at 726 pence at 8:19 a.m. in London.
Scholars are abandoning traditional textbooks faster than sales of digital learning tools can replace them, and Pearson is already undergoing a transformation program which has seen it cut jobs and sell offices, including the former headquarters of the Financial Times newspaper. It is also losing market share as customers change their consumption habits, including a trend of students using materials that they can get for free, Berenberg analyst Sarah Simon wrote in a research note Thursday.
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