The future isn't looking so bright as it might have thought when it acquired that house from the Germans.
Penguin's owner Pearson announced its projected earnings for the upcoming year and those earnings are down. So far down that the stock has taken a hit as investors heed the warning and clear out.
It's nothing new, actually.
Educational publishing, Pearson's heart, has been in decline for some time. School systems still don't have a lot of money to throw around on new textbooks, new technology, or new anything. It's all local districts can do to pay the salaries and keep the roof from leaking. Which means Pearson doesn't get that boost to the bottom line that stockholders so love to see.
Until the Penguin-Random House merger produces results of some sort, the lack of confidence will continue.
Will enough synergies be realized to cut costs while retaining profits? Will the merger be the income producer as advertised, or will it be another example of over-reaching in the Barry O'Callaghan mode?
We've all heard that markets hate uncertainty, and there's plenty of uncertainty to go around at Random Penguin House these days.
But not to worry, if you hold stock for the long term.
At year's end, Penguin may well meet or exceed those lowered expectations, and buyers will flock (not that penguins can fly, but surely they flock, don't they?) to snap up the stock of a well-run company.
Unless the penguin doesn't fit well into the house.
But that's a story for another day.
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