Dive Brief:

• Pearson saw its stocks fall by 16% after a third-quarter earnings report showed a 2% decline over the same time last year.
• The educational materials provider brought in $2 billion this summer, thanks to its sale of the Financial Times and the Economist group, but the dip took down $2.5 billion in stock value.
• The company attributed the dip to "cyclical and policy-related factors," including lower enrollment in American community colleges.

Dive Insight:

The sale of Pearson’s media holdings was supposed to give the company a boost that it intended to invest back into its education offerings. The textbook and test developer has struggled to overcome distrust in the U.S., thanks to its involvement with developing Common Core-linked tests — and the occasionally troubled rollouts of those exams.

But it seems its current downturn stems mostly from higher ed sales, not an unfriendly K-12 market. For example, a partnership with the University of Florida to provide digital education fell through earlier this year, and the declines seem to come from lower college enrollment (as well as slower overseas textbook sales). CEO John Fallon told Bloomberg, however, that he sees the company's current issues as "cyclical," but "more persistent" than expected.