Pearson Posts Biggest Loss in History

WOES CONTINUE FOR PEARSON, the embattled publisher that took a pre-tax loss of £2.6 billion (approximately US $3.2 billion) for 2016—“the biggest in its history,” according to The Guardian. The company’s latest earnings report attributed the drop to “much worse than expected decline in North American higher education courseware” business, where revenues dropped 18 percent. Also troublesome was the U.S. assessment market where revenues dropped 22 percent, due partly to losing contracts to deliver state-wide assessments.

The company issued a warning earlier in January that the numbers weren’t going to be pretty.

Pearson reported growing its “digital and services revenues” to 68 percent of overall revenues in 2016 (up from 65 percent the previous year). Both Connections Education, its virtual K-12 school business, and Pearson’s online program management programs with universities grew in revenues and enrollments. The transition from print-first offerings has been a focus ever since CEO John Fallon took the helm.

To simplify its portfolio and generate more cash, Pearson is looking to sell its 47 percent stake in Penguin Random House, along with Global Education, a test-prep business in China. The company is also looking for a “strategic partner” for Wall Street English, an English-language learning operation.

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