Pearson, the owner of the Financial Times and book publisher Penguin, announced a profit upgrade and now expects full-year earnings to be up 10% in 2011.
The company, which had told investors to expect earnings per share to grow from 77.5p in 2010 to 83p in 2011, has upped its forecast to 85p.
This represents a year-on-year increase of 10% with analysts upping full year pre-tax profit forecasts by about £25m to £875m.
Pearson said that it earned about £2bn in digital revenues last year and £600m from operations in emerging markets.
Pearson did not provide specific divisional figures but said that the Financial Times Group, home to the FT, is expected to report "good growth despite weak and volatile advertising market conditions".
Pearson said that digital and subscription-based revenues "continued to climb".
Penguin, publisher of authors including Jamie Oliver, Dawn French and The Help writer Kathyrn Stockett, had a "strong" performance in the critical Christmas trading season.
"Despite rapid industry change and tough conditions in the physical book retail market, Penguin continues to benefit from its innovation and scale in the fast growing digital books market," said Pearson.
Despite the upbeat trading update, investors were slightly wary and Pearson's share price fell by 50p, around 4%, on the news at 10am before rallying to 1210p by midday.
Nick Bertolotti at Credit Suisse said that the "majority" uplift in EPS guidance was achieved through one-off tax and interest benefits.
Pearson said that net interest for the year will benefit to the tune of £55m and that the effective tax rate will "be around the low end of our guidance" of 22% to 24%.
Credit Suisse also said Pearson's sale of its 50% stake in FTSE International group, for £450m in December, needs to be factored in as a loss of earnings in 2012.
"We have spoken to the company which highlights that the majority of this beat [upgrade] is through tax and interest," said Credit Suisse.
"It re-emphasises that 2012 will see the 2.5p earnings per share dilution of the FTSE International stake disposal (which it says has not yet been factored into most of the 85p consensus), integration charges and tough economic environment".
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