by David Safier
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.Another article hints at the reason for the company's revenue loss.
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.
Political and economic problems have combined to derail the group's plans to sell text books and mark exams in the United States, and the group blamed a drop in revenue from exam marking in the U.S. and Britain, its top two markets, for its disappointing first-half performance.I don't know much about the situation in Britain, but it's pretty clear what's happened on this side of the pond. With education funding just beginning to recover from the 2009 downturn, it's harder to get schools to buy stuff. More important, Pearson was supposed to be one of the major beneficiaries of Common Core spending. It expected to dominate the market with its high stakes tests, along with educational materials schools would purchase by the truckload to help students boost their scores. But it got pummeled by the double-whammy uproar over Common Core from the right and the left. States have pulled out of what was supposed to be a nationwide common set of standards, and many of them decided to go with other tests from other sources. It looked like a sure thing, but it's looking more and more like Pearson bet on the wrong pony.