Pearson profits pumped, Burberry sales stumble

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The FTSE 100 is expected to fall 12 points on Wednesday, after closing lower at 7,755.93 the day before.

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Publishing group Pearson said it expected 2017 adjusted operating profit to be at the upper end of forecasts at £600m-605m at guidance exchange rates. At average effective exchange rates it expected to report adjusted operating profit around £570m-575m and adjusted earnings per share of 53.5p-54.5p. “We expect growth from that base and are giving guidance for 2018 adjusted operating profit of between £520m and £560m,” Pearson said.

Informa, the events and specialist publishing group, has agreed a merger with smaller events-focused rival UBM in a deal that is expected to generate "significant synergies", Informa, which will offer 1.083 of its shares and 163p per UBM share, or 972.43p, will also supply chairman Derek Mapp and chief executive Stephen Carter for the combined group.

Luxury clothes retailer Burberry reported slower sales growth in the last three months of 2017 than had been expected but remained confident of sashaying on to hit full year profit targets as it makes initial progress on its new strategy. Sales of £719m in what is the FTSE 100 group's third quarter were down 2% on a reported basis but up 2% on a like-for-like basis.

Newspaper round-up

The dramatic collapse of Carillion has started to hit thousands of the firm’s suppliers, as the real world impact of the demise starts to emerge. Subcontractors owed money by the construction and services giant are already being pressurised by their banks and have begun laying off workers, as the threat of contagion afflicting the sector was likened to a near re-run of the banking crisis. - Guardian

Virgin Atlantic has called for a guarantee to prevent passenger charges rising on the back of an expanded Heathrow as the airport kicks off a 10-week consultation on its plans. The airline’s chief executive Craig Kreeger has suggested there should be a "passenger cost guarantee" to ensure airport charges do not rise significantly from their current levels. – Telegraph

The pension fund trustees overseeing a £1 billion deficit in the retirement schemes of GKN have put themselves at the centre of the battle for the FTSE 100 engineer, saying that any takeover deal for the company will need to go through them first. A £7 billion takeover approach by Melrose, the quoted conglomerate, has been rejected and there has been speculation of counter-offers coming from American private equity or break-up bids by rival automotive and aerospace components groups. – The Times

US close

US stocks failed to stay in record territory on Tuesday as lower oil prices hit energy stocks and investors reacted to news that President Donald Trump's former chief strategist Steve Bannon had reportedly been subpoenaed as part of the probe into alleged Russian interference in the 2016 election.

The Dow Jones Industrial Average set a fresh intraday record, breaching 26,000 for the first time, but closed 10 points lower at 25,793. The S&P 500 and the Nasdaq were down 0.35% and 0.51% at 2,777 and 7,234 respectively.

The positive early sentiment was underpinned by earnings from the likes of Citigroup and UnitedHealth.