More cuts are ahead for the Financial Times

The group said earnings for 2003 should "be within the range of current market expectations".

Pearson added it expects to see profits at all of its divisions - except its Professional unit.

But it did warn advertising revenues at the Financial Times are set to slide further, declining 15% over the year.

"Though market conditions remain tough for corporate advertising and technology-related businesses, we continue to perform strongly in our markets and are benefiting from further efficiency gains," a company statement said.

New deals

Pearson added that its US School and Higher Education businesses are expected to report good underlying progress, with revenues set to rise by 5-7%.

But the group predicted its Professional division would not do as well as last year, with its US Transportation Security Administration (TSA) contract still owed $150m (�88m) for a contract completed last year.

Meanwhile, Pearson also announced it had won three new contracts, including several US school testing deals worth $160m (�94m).

It also landed a renewed and expanded 10-year, $160m contract with the US Department of Education for work on student aid schemes, and a nine-year deal to provide testing services to the National Association of Securities Dealers.

In July the firm announced a loss of �1m for the first six months of the year, blaming falling sales and advertising revenue for the decline.