Friday 24 February 2017 10:19 am

Here’s what analysts are saying about Pearson’s full-year results after a “challenging” year

Pearson did its best to prepare investors for today’s full-year results with a January trading update.

The former Financial Times publisher’s share price jumped up at the open, before falling slightly later in the morning.

Here is what analysts are making of the figures…

The Liberum media team, led by Ian Whittaker, which has a “sell” rating on the FTSE 100 company:

There were no major surprises in the Pearson numbers relating to the 2016 results nor the 2017 guidance as Pearson had given these numbers at its January trading update (although the 2016 adjusted earnings per share (EPS) of 58.8p was higher than the 57p indicated last month).

Pearson kept its 2017 guidance of operating profit in 2017 of £570m to £630m and adjusted earnings per share of 48.5p to 55.5p, with a cashflow conversion rate of less than 90 per cent. It also restated its intention to rebase the dividend.

Neil Campling, head of global TMT research for Northern Trust Capital Markets, said:

“There is no new cost savings plan announced which could be considered disappointing."

The high end of 2017 guidance assumes an improvement from the key channel partner inventory correction that has taken place through 2016, but given Pearson’s poor execution and visibility we feel this end of guidance is likely too optimistic.

S&P Global also has a “sell” rating on Pearson. On today’s figures, they said “sales and earnings declined as expected”. They also anticipate “another weaker year ahead”.

We keep our estimates as results were in line. 2016 underlying sales declined 8% due to expected declines in US and UK student assessment and US school courseware, and a worse-than-expected decline in North American higher education courseware.