Pearson Names New N. American President as Stock Plunges on Half-Year Results
The stock price for Pearson PLC, the world’s largest education business, dropped precipitously Friday after its announcement of a 7 percent decline in underlying sales to about $2.5 billion for the first half of 2016.
Reuters reported that the company’s shares were the biggest losers on Britain’s Financial Times Stock Exchange 100 for the day. Analysts were disappointed that the decline was 2 percent larger than had been anticipated.
The drop in underlying sales—which are sales that omit adjustments that could distort a company’s trading performance, such as exchange rate movements or acquisition costs—was due mostly to expected declines in assessment revenues in the U.S. and the U.K., the company indicated in its official announcement. It also attributed the decline to a phasing of gross revenues and returns from course software in its division that handles North American higher education.
Former SAP Exec Named to Post
The company announced a leadership change in North America as the markets reacted to the half-year results. Kevin Capitani has been named president for Pearson, North America. Capitani, who is based in Austin, joins the education enterprise after more than 20 years working in various capacities at SAP, the global business applications and technology company. Most recently he took a year and a half off to spend time with his family, according to his LinkedIn profile.
Pearson CEO John Fallon praised Capitani in a statement the company released, saying: “Kevin’s record of success in growing a large technology-based business is second to none. Having managed large field sales teams, developed institutional selling capability, and helped SAP move towards selling cloud-based services, Kevin will be an invaluable addition to the team.”
Capitani replaces Don Kilburn, who held the presidency since January 2014, and who will be moving to a senior business development role, according to a Pearson spokesman.
Restructuring, Other Changes Underway
In January, the company announced plans to cut 4,000 employees, or about 10 percent of its workforce. That initiative is on course, with about 3,450 employees notified that they will be leaving, Pearson indicated.
The company’s sale of PowerSchool last year was cited as one of the reasons its revenues declined 11 percent at constant exchange rates. Another reason was a change in the revenue model at Pearson’s Connections Education, which changed the way it reports its sales, the company said.
Looking ahead, the company sees its investment in “new digital products and services” as offering growth potential, including its first online degree partnership in the U.K.
In the meantime, MarketBeat summarized analysts’ reactions to the recent developments: six rated Pearson a “buy” opportunity; six recommended holding onto the stock, and three gave it a “sell” rating.
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THERE will be a work re call befor spring on 2020 and i realize there must of been a problem with a few things an I have been out for a few and there is a “so called set back but its being handled right now and there will be a short delay…..Due too a few misunderstanding with the paper work as well as media errors ,like mis-spelled names and on doc….and stock adjustments made by unathurized personal..Which i seriously disagree. simply MR.Pearson CEO…..THANK YOU!
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