British publishing and education company Pearson has said a drop in demand for higher education textbooks in its biggest market, the United States, has resulted in a weaker-than-expected third-quarter performance.

The announcement sent shares in the education publisher tumbling 10 per cent in early trade, although the group said cost-cutting and a weak pound enabled it to maintain its full-year and mid-term profit forecasts. Its shares closed down more than 8 per cent.

Pearson, which sold the Financial Times newspaper and its stake in the Economist last year to concentrate on education, said poor demand for textbooks from college campuses in the US had compounded pressures on its American and British exam-marking businesses.

That led to a 7 per cent decline in organic sales in January-September, worse than the 5 per cent fall analysts had predicted.

“Some of our markets have been challenging, in particular, sales in our largest business, US higher education, are down due to cautious buying patterns from key retailers,” Pearson chief executive John Fallon said. “This is an industry-wide issue.”

The 172-year-old company is still reeling from profit downgrades in the past few years sparked by pressures on all its major markets. It announced plans in January to cut 4,000 jobs, some 10 per cent of its workforce.

It has been hit by a recovering US economy as more people entered employment, reducing college enrolment numbers.

Fallon said these changes meant colleges were taking a more cautious approach to ordering textbooks, while many students were also happy to use second-hand books rather than buy new ones.