Pearson may be the world's largest education company, but the firm has just confirmed that they have lost numerous high-profile contracts in the United States in the first quarter of 2016. Will the British institution still manage to recover from a massive loss?
Decrease In Sales Pose Dangers
The Daily Mail reports that Pearson's sales have gone down by 4 percent after losing US contracts from January to March alone. In addition to that, the rapid decline appears to have intimidated investors in other possible markets like Saudi Arabia as well as Brazil.
Perhaps the most depressing part of the news is the possibility that several Pearson employees are currently in danger of losing their jobs. It has also been reported via Reuters that almost half of the company's 4,000 workers have been already been contacted about the downsizing.
A Positive Outlook For A Better Future
Despite the loss, Pearson Chief Executive Officer John Fallon appears to be undaunted and is looking forward to a recovery. "We are making pretty good progress, we are trading in line with the financial goals," he had said in a statement.
The company's optimistic views are further explained by an improved program that aims to find new ways to enhance education as well as cut down costs. Moreover, analysts are predicting that Pearson will recover by the end of 2016.
"Pearson's first quarter is by a long way the least meaningful quarter in terms of its relevance for and impact on full-year performance," analysts from Citi had reported. "That said, it is encouraging that there is nothing in the release that significantly differs from the updates given in January and February. Indeed, the commentary on the progress of the restructuring program is, at the margins, encouraging."
It is expected that Pearson's shares could continue to plummet but will make a full recovery in the next two years.
