Bertelsmann Open to Increasing its Stake in Penguin Random House

John Fallon said Pearson is taking

German media group Bertelsmann may raise its stake in book publisher Penguin Random House, it said on Wednesday after British joint venture partner Pearson issued a major profit warning and said it might sell the stake.

Pearson said it plans to sell its 47% stake in US -based Penguin Random House-one of the world's largest book publishers-to bolster its finances and invest in other parts of its business.

Rapid growth in employment and increasing education regulation has reduced higher-education enrollments in the USA, which has put pressure on Pearson's business even as it has sought new sources of growth in emerging economies such as Brazil and China.

Pearson chief executive John Fallon told reporters on a conference call that the firm was facing a "challenging transition", Bloomberg News reported, as its United States college textbook business faces declines in line with university enrolments.

In addition, Pearson has withdrawn its guidance for underlying operating profit of GBP800.0 million or more for 2018.

The collapse in shares is the sharpest on record for Pearson, with data going back to 1986.

In January past year, Pearson set out a plan to hit an operating profit target of GBP800.0 million by 2018.

"There is no getting around how tough it is", Chief Executive John Fallon said of the education sector in a call with reporters.

In particular, Pearson said it has been tightly managing discretionary costs and said it will pay out around GBP55.0 million less than originally planned under its staff incentive scheme, helping keep operating profit within the guidance range.

Pearson said it had suffered a 30% fall in sales in the last three months of 2016, producing an "unprecedented" 18% fall for the whole of 2016.

Penguin Random House was "the clear number one in the publishing industry" Rabe said, with sales of around 3.7 billion euros ($4.0 billion) in 2015. "Our higher education business declined further and faster than expected in 2016".

Bertelsmann has repeatedly said that it wanted to increase its stake in Penguin Random House, the largest general-interest paperback publisher in the world. The current dividend equals 6.4 percent of Pearson's share price, the highest yield among companies in the U.K.'s benchmark FTSE-100 Index.

Along with recalibrating earnings guidance, it unveiled plans to cut the dividend and potentially offload its stake in Penguin Random House. It has sold several assets during the period, including the Financial Times newspaper and its 50% noncontrolling stake in the publisher of the Economist magazine, to fund its growth across global education, raising billions of dollars.

Furthermore Pearson announced that it plans to sanction a final dividend of 34 pence for 2016, making a total overhead for the year of 52p.

Related news:

Hot News

isis-killer-beheading-video-story-top Sisters reported missing from Rhode Island in 1985 found alive
Jan 18, 2017 - 01:16
On that day, two girls, Kimberly and Kelly Yates were reportedly taken by their mother, Elaine Yates, in Warwick. A missing-persons complaint was filed on August 26, 1985, by the girls' father, Russell Yates.

isis-killer-beheading-video-story-top 81 whales die after becoming stranded in Florida Everglades
Jan 18, 2017 - 01:15
Males can grow up to 20 feet in length (6 meters) and weigh 1,500 pounds (700 kg), while females grow up to 15 feet (4.5 meters). Nearly 100 false killer whales that had become beached off a South Florida coastline have died or needed to be euthanised.

isis-killer-beheading-video-story-top Juventus upset fans after rebranding their famous club crest
Jan 18, 2017 - 01:14
Gone are the black and white stripes, the dash of gold underneath the name and the iconic bull, the symbol of Turin. Club president Andrea Agnelli says, "This new logo is a symbol of the Juventus way of living".

isis-killer-beheading-video-story-top German automakers will pay tariff on cars built outside US
Jan 17, 2017 - 00:42
He added that BMW should build its new auto factory in the United States because this would be " much better " for the company. BMW will make 3-Series sedans starting in 2019 at a $1 billion plant it's building in San Luis Potosi state in central Mexico.

isis-killer-beheading-video-story-top Watch Cubs 'Pardon' President Obama During Hillarious White House Visit
Jan 17, 2017 - 00:39
The Cubs pushed forward their White House visit in order to celebrate their achievement with Obama, an adopted son of the city. The president also joked about how he and recently retired catcher David Ross both enjoyed a year long retirement party.

isis-killer-beheading-video-story-top SpaceX success; plans extra launch facilities
Jan 17, 2017 - 00:38
That failure has been traced to the failure of a high pressure helium vessel in the Falcon 9's second stage liquid oxygen tank. About 80 Iridium NEXT satellites are scheduled to be deployed, and SpaceX is committed to carrying at least 70 of them.

isis-killer-beheading-video-story-top Spurs 4 West Brom 0
Jan 16, 2017 - 00:47
Kane nearly had a second when Foster stopped his header with his legs and scrambled back to grab the loose ball on his goalline. In the 26th minute, Gareth McAuley unfortunately deflected in Christian Eriksen's shot past Foster for Spurs' second.

isis-killer-beheading-video-story-top Dimitri Payet: West Ham should ditch striker now - Ian Wright
Jan 16, 2017 - 00:40
Payet played two seasons for Marseille but, at the time of his transfer, said he was unhappy to be sold and wanted to stay. The Frenchman's departure would be a major blow to West Ham and their fans, for whom Payet has become a terrace darling.

isis-killer-beheading-video-story-top U.S. to lift some sanctions against Sudan
Jan 15, 2017 - 00:42
President Omar al-Bashir is wanted by the International Criminal Court for war crimes in Darfur. The billionaire real estate magnate has yet to comment publicly on the lifting.

Brother of Kim Kardashian's Paris Chauffeur Among Heist Suspects Still Held: Cops
Jan 14, 2017 - 00:31
The news comes after French authorities reportedly released three men and a woman who were among those earlier arrested. A French judge may travel to the United States to speak with Kardashian about the investigation.

isis-killer-beheading-video-story-top Christmas clothing cheer for M&S
Jan 13, 2017 - 00:35
Rowe noted that while the group posted a strong Q3, its Q4 numbers will be "adversely affected by sale timing and a later Easter". As a result of this, full-price Clothing & Home sales rose in the period. "We expect the shares to continue to underperform".

At least 21 people killed in twin Taliban attacks near Afghan parliament
Jan 13, 2017 - 00:35
John Nicholson, the commander of the USA -led North Atlantic Treaty Organisation coalition, said in the statement. Both U.S. and Afghan troops suffered casualties, and responded by calling in airstrikes on the village.

Falcons' Ryan looking at past playoff mistakes to prepare for Seahawks
Jan 13, 2017 - 00:35
Jones said he would have no problem throwing up his hands and hunching his shoulders if such an incident happens again this time. Sure, you can still drive, but without brakes, you're going to have to avoid hills, stop signs, red lights and small children.

isis-killer-beheading-video-story-top Ford Motor Company (F) Upgraded to Buy at TheStreet
Jan 12, 2017 - 00:34
The company reported the earnings of $0.26/Share in the last quarter where the estimated EPS by analysts was $0.2/share. AllSquare Wealth Management LLC boosted its stake in shares of General Motors Company by 16.5% in the second quarter.

Irish woman critical with head injury after Australia plane crash
Jan 12, 2017 - 00:33
She told reporters: "Because of the location and communications, it's hard to ascertain who the deceased was". It is understood that the 13 year old boy's family watched on in horror as they were in the second craft.