“We are, however, announcing today that over the next few months, we will start to move ahead with further plans to simplify the company and make it more efficient.”
- CEO 4/24/20
Pearson and COVID-19: At Least We Have Connections Academy
The widespread cancellation of standardized testing across America during this COVID-19 pandemic had me wondering about Pearson Learning (PSO as it is known in the stock market), a mammoth education corporation located in the United Kingdom and with offices in the United States.
I have written about Pearson a number of times over the years (see here and here, also). Pearson planned to profit handsomely from the Common Core State Standards (CCSS). That didn’t go as planned. In January 2016, Pearson cut 4,000 jobs.
Pearson’s “restructuring” has continued over the years, and, as one might expect during the coronavirus crisis, appears slated to continue. From TheLayoff.com/pearson-plc:
Sigh…..
(TheLayoff.com advertises itself as “a simple discussion board for all of us who would like to learn more about the rumors or possibility of job cuts in our company.”)
On January 17, 2017, it had its worst loss in a single day since 1986, closing at $7.23 per share.
On April 27, 2020, Pearson ended the day at $5.69 a share, making January 17, 2017 look like, “I wish.”
Time to once again “simplify the company.” However, according to Pearson’s 2020 first-quarter financial summary, “We have chosen not to furlough staff and are instead re-deploying people as much as we possibly can around the business to support the areas of greatest need and opportunity.”
As for that “opportunity,” at least in the short term, it seems that online learning is Pearson’s only area for increased revenue:
Highlights for the first quarter
- Trading is in line with revised expectations, revenue declined by 5% versus prior year driven by COVID-19.
- Global Assessment revenue declined 3% due to the closure of testing centres in our Professional Certification business, and a decline in Clinical Assessment attributable to school closures.
- International revenue declined 10% due to test centre and school closures across many of our International markets and also the phasing of courseware sales in the UK.
- North American Courseware revenue declined 10% due to the expected continuation of trends seen in US Higher Education in 2019, exacerbated by the closure of campus-based bookstores and a weaker performance in courseware in Canada as a result of school closures.
- Global Online Learning revenue grew 6% with a strong performance in Virtual Schools driven by good enrolment growth and planned new school openings as well as growth in Online Program Management.
…
In Connections Academy, our Virtual Schools business, revenue grew strongly due to growth in enrolments and new school openings. We have seen a surge in applications in March compared to 2019 as many explore full time digital learning for the first time. Pearson is well placed to benefit from the increased interest in and appetite for online learning. We are seeing many administrators and educators reach out to discuss large scale solutions for virtual schooling as well as potential interest from new states which have not previously considered virtual schooling as a choice for students.
In recent years, Pearson experienced its highest stock price on January 07, 2019, when it closed at $13.16 per share, arguably the result of its years of “restructuring” between then and the last time it closed at $13.anything per share, in October 2015 (following a marked drop from $18.something per share).
Prior to the COVID-19 crisis, on December 23, 2019, Pearson stock closed at $8.49 per share and was already headed downward.
Yes, there’s a pandemic now, and many US school districts are attempting to make the best of it with some sort of distance-learning option, which may include a “virtual school” component.
That noted, it seems quite the reach for anyone who can read Pearson’s 1996-2020 history of its stock price per share to believe that realistic fiscal hope rests with “virtual schools business” Connections Academy, if indeed that is how Pearson’s executives are trying to play it.
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deutsch29: Mercedes Schneider's Blog 
Reblogged this on David R. Taylor-Thoughts on Education.
Another enlightening post from you, Mercedes! Thank you. I had no idea about Connections Academy. I live in MA and recently enrolled my daughter in TECCA not knowing it was owned by Pearson. I was looking for an online school for my teen daughter who has school refusal. I was thrilled to learn of a free online public school. I should have been suspicious and done more research. I am a public school teacher, but still naive I guess! This was in February. She was put on the waitlist. By the time she was offered a place in March, I had learned in some Facebook parent groups that TECCA was a “nightmare” for kids with school anxiety because it is just like public school – rigid, as well as loads of work. So I declined the place. Thank goodness! If I had taken it I would definitely pull her out now that I know who owns it. It angers me that my state’s ed department is using our ed tax dollars to support this profit-making monster. I will be looking into this….Thank you so much again!