Pearson delivered its promised double-digit earnings growth during 2002, but its business daily Financial Times slipped into the red during the second half of last year.
Tough advertising conditions for the title's key categories - financial services, technology and business to business - meant that advertising volumes across the daily fell 24% during the year and ad revenues were down 23%.
Circulation at the paper fell 6% to an average 473,587.
The company is not expecting an advertising recovery across its business papers during 2003.
Marjorie Scardino, chief executive of Pearson, said: "Last year we increased earnings, generated more cash and improved our return on capital, even though we faced an advertising recession far deeper than expected. Our broadly-based education business and Penguin recorded good growth. While the economic environment is uncertain, we are confident we will make further progress on earnings, cash and returns this year."
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