UPDATE 2-Pearson confident for year after strong Q1

* Q1 constant-currency growth of 12 pct to 1.08 bln pounds

* Q1 net debt rises due to exchange rates, working capital

* Shares fall 0.3 percent

(Adds shares, analyst comment, details on debt, background)

By Georgina Prodhan

LONDON, April 30 (BestGrowthStock) – British media group Pearson
(PSON.L: ) said it was confident underlying profit would grow this
year after first-quarter revenues rose 12 percent at constant
currencies as all parts of the company started the year well.

Pearson said its U.S. school curriculum business returned to
growth in the first quarter, helped by more states adopting new
textbooks, as did advertising revenues at FT Publishing, which
includes the Financial Times newspaper and website.

Pearson last month forecast a rise in profit this year,
after record investments in its education business — the
world’s largest — helped it take market share and beat
forecasts for 2009.

“The first quarter never tells us a great deal about the
full year, but our direction of travel is encouraging,” Chief
Executive Marjorie Scardino said. “We’re confident that we can
build on our consistent record of profit growth this year.”

Pearson shares, which hit their highest level in almost nine
years this week, slid 0.3 percent to 1047 pence by 0730 GMT. The
European media index (.SXMP: ) rose 0.5 percent.

The shares now trade at 14.6 times expected 2010 earnings,
according to Reuters data, above McGraw-Hill’s 12.6 times but
below the global publishing sector average of 22.1.

“At this point we believe there will be no significant
change to consensus estimates given Q1 is a small quarter.
Nevertheless the upbeat trading update is positive for
sentiment,” UBS analyst Alastair Reid wrote in a note.

U.S. rival McGraw-Hill (MHP.N: ) reported this week that
revenue at its higher education, professional and international
group rose 8 percent, helped by better sales of online courses
and e-books. It lost a Florida testing contract to Pearson.

Pearson said its Penguin books unit also made a good start
to the year, particularly in the United States, UK and at
illustrated reference book imprint Dorling Kindersley, and said
it had a strong publishing schedule for the second half.

It added that net debt rose during the first quarter,
without giving details, due to exchange rate movements and a
normal seasonal build-up of working capital in education.

The company gave no update on the possible sale of its 61
percent stake in financial information provider Interactive Data
(IDC.N: ), which is reviewing its strategic alternatives.

Sources briefed on the matter have told Reuters that a
number of private equity bidders are in an auction to buy it.
McGraw-Hill was also a potential buyer but has dropped out, the
sources said last week.

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(Reporting by Georgina Prodhan; Editing by Jon Loades-Carter
and David Cowell)

UPDATE 2-Pearson confident for year after strong Q1