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Sales Rise at AWL, Fall at Penguin
-- 8/10/98
Pearson reported that sales at AWL, its education group, rose 7%, to L180.4 million ($300 million) in the first six months of 1998, while the operating loss in the group was cut to L19.5 million ($32 million) from L29.9 million ($49 million). Sales in the Penguin group fell 4%, to L231.4 million ($384 million), and operating income dropped 27%, to L15.4 million ($25 million).
Pearson attributed the improvement in its education group to cost reductions and strong sales in its elementary school business. According to Pearson, the decline in results at Penguin was due to the loss of revenue from Troll, which was sold to Torstar last year, as well as to a publishing schedule that calls for the release of a number of its major authors, including Tom Clancy and Patricia Cornwell, in the second half of the year. The company also said further integration of Putnam Berkley should contribute to savings of L20 million in 1998. At the end of July, Putnam completed the move of its New York City offices on Madison Ave. to Penguin's headquarters on Hudson St.Despite closer scrutiny of Pearson's purchase of Simon &Schuster's educational and professional assets by the Federal Trade Commission, the company still expects to close on the deal before the end of the year.

Troll's Toll

While Pearson reported that the sale of Troll hurt its sales, its purchase by Torstar has not helped earnings in that company's supplementary education division. Torstar reported that Troll lost C$5.2 million in the second quarter and dragged down results in the group to an operating loss of C$800,000 in the period, compared to a profit of C$3.6 million in the second quarter of 1997. Sales in the supplementary group jumped to C$72.1 million from $34.5 million. Torstar said operating results for the supplementary group for the remainder of the year will depend on an improved performance from Troll, which lost C$3.5 million in the first quarter.

Profits at Harlequin declined in the quarter to C$21.4 million from C$21.9 million, while sales rose 2.5%, to C$124.1 million. The decline in profits was attributed to higher developmental costs that included testing, a crafts continuity series and Spanish and Inspiration book clubs.
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