Shares in troubled publisher Pearson rose six per cent today after the company released some long-awaited good news.
The education firm now expects its full-year operating profit to be in the upper half of its forecast range. Pearson said it aims to make adjusted operating profit of between £576m and £606m from previous guidance of between £546m to £606m.
The company's share price rose 6.11 per cent to 659.5p.
However, in the trading update for the first nine months of the year, Pearson's sales fell two per cent in underlying terms, mainly due to declines in the US. Sales of higher education courseware in the US fell by one per cent.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “These are positive results for Pearson overall."
Hyett said there are signs that the drop in Pearson's sales seems to be stabilising.
"That reflects good growth in digital courseware in the US, which is important since the group’s strategy pivots on becoming the long term winner in digital learning.”
Earlier this year, Pearson, which used to own the Financial Times and The Economist, slashed 3,000 full-time jobs to make efficiency savings following a number of profit warnings.
Pearson is turning its focus to digital, and it said US higher education digital courseware revenue grew 11 per cent in the nine months, while eBook revenues increased more than 20 per cent.
Pearson's chief executive, John Fallon, said: "We continue to invest in growing market opportunities, gaining share with our digital transformation, and becoming simpler and more efficient. With good cash generation and a strong balance sheet, we are going to return £300m in surplus capital through a share buyback.
"We expect tough market conditions in our biggest business to continue over the next couple of years. We're focused on being the long term winner in digital learning and creating sustainable value for our shareholders."