LONDON (AP) — Shares in Pearson PLC, the owner of the Financial Times newspaper and Penguin books, rallied 4.5 percent after the company indicated profits for 2008 would be ahead of market expectations despite the difficult economic environment.

In a trading update ahead of full-year results, Pearson said it will report solid growth because of the strength of the dollar against the pound, a lower tax rate and strong demand for the education division's testing products.

As a result, Pearson said it now expected to report earnings per share growth of around 20 percent for 2008, which was ahead of market expectations.

"We are naturally cautious about the economic environment, but we take confidence from our performance in 2008," said Marjorie Scardino, Pearson's chief executive. Scardino said she expected the company's core education business to continue to prosper despite some weakness in the U.S. school publishing market caused by pressure on state budgets. Meanwhile, she said the media division, which is led by the Financial Times, should continue to benefit from the shift towards subscription and content revenues, despite the downturn in the advertising market.

Pearson shares closed up 27 pence, or 4.5 percent higher, at 625 pence.