Pearson says trading in line with expectations

LONDON (Reuters) - Pearson (PSON.L), the world's largest educational publisher, said it was trading in line with expectations and that it expects its higher education business sales to grow 3-5 percent with stable margins.

Pearson, publisher of Penguin books and the Financial Times, said on Friday its schools business was expected to achieve underlying sales growth in the 4-6 percent range with margins improving.

The company said its professional revenues were expected to be broadly level amid improving margins while Penguin's margins were continuing to improve. In the Financial Times Group, full-year margins were expected to push into double digits.

The comments came in a trading update ahead of the company's annual shareholder meeting, scheduled later on Friday.

The update marks the first major market announcement since Pearson unveiled annual earnings at the top end of analyst expectations on February 26.

Analysts noted ahead of the AGM update that the first half accounts for only around 10 percent of Pearson's annual profit and therefore the group usually has limited visibility at this stage of the year.

Shares in Pearson, which have outpaced the FTSE media sector .FTASX550 by 5 percent in the past year, closed at 863-1/2 pence on Thursday, valuing the company at 6.9 billion pounds.

The shares recently hit a five-year high at 893 pence and have surged 11 percent since the start of the year, bolstered by analyst notes and market speculation about a possible restructuring or leveraged buyout. This has centred on senior management change within the company, a move to exit none-core assets, such as the Financial Times Group and a possible sale of the 62 percent stake the company holds in U.S.-listed market data provider Interactive Data Corp. (IDC.N).

However, Chief Executive Marjorie Scardino who has run Pearson for a decade, has made clear she is not minded to relinquish control of the business.

The international media and education company generates around two-thirds of its sales in the U.S. and a quarter in Europe. In 2006, 19 percent of sales came from the Penguin book publishing group and 16 percent from the Financial Times group.