Pearson teaches traders a lesson as turnaround at the education publiher gathers momentum

“Small but beautiful” was how analysts at Citi described Pearson today after the academic publisher reported a positive start to the year.

The company posted a 1% rise in revenues for the first quarter, with sales in the US rising by 3%. In its core business — the UK, Australia and Italy — turnover increased by 6%.

Shares shot 39.2p higher to 870p as Catherine O’Neill at Citi said Pearson’s turnaround now looks firmly on track. She added: “The group has delivered a solid set of results. This will give the market confidence that the group is reliable in its ability to predict revenue trends in US higher education.”

Pearson confirmed it should deliver operating profit of between £520 million and £560 million for the year, and its target of hitting £300 million of annualised cost savings by 2020 remains on course.

Pearson’s gains helped the FTSE 100 index to move 32.91 points up to 7535.60.

Other notable movers included Smurfit Kappa, the Irish packaging company, which has resisted two takeover proposals from Memphis-based International Paper this year. Smurfit unveiled first-quarter earnings grew by 22% on strong demand for cardboard boxes and a fall in fibre costs.

Smurfit, which makes packages for the likes of Unilever, Nestlé and Procter & Gamble, now expects full-year earnings to be “materially better” than the €1.24 billion posted last year (£1.1 billion). Shares rose 34p to 3056p.

Oil major BP was also making gains on rumours it is eyeing up some of the shale assets in the US belonging to BHP Billiton. BHP is selling 800,000 net acres in the Eagle Ford, Permian, Haynesville and Fayetteville Basins — believed to be worth $10 billion (£7.4 billion). According to reports, BP has hired Morgan Stanley to take a look. BP shares rose 7.4p at 551.3p, and BHP Billiton climbed 22.4p to 1580.4p.

It was also good news for Dixons Carphone which is undergoing a radical shake-up under new boss Alex Baldock. This session, Royal Bank of Canada Richard Chamberlain gave Baldock his full backing, upgrading his price target to 230p from 210p previously. Shares rose 11.9p to 215.9p.

But it was a rare bad day for Games Workshop, which lost 10p to 2430p despite the figurines-seller upgrading its profits forecast for the full year. Analysts put the fall down to simple profit taking.

But the biggest faller was AIM-listed internet domain owner Minds + Machines after investors gave a thumbs down to its acquisition of Florida-based ICM for $40 million.

ICM owns “niche” web domains such as “.xxx”, “.porn”, “.adult” and “.sex”.

Minds + Machines shares were down 1.1p, changing hands at 9p.