UPDATE 2-Pearson shares jump on new cost-cutting drive and strategic review

* To cut 300 mln pounds in costs

* To review U.S. K12 courseware business

* Shares up 15 percent (Adds reaction, shares)

LONDON, May 5 (Reuters) - Pearson said it would cut more costs and consider selling its U.S. school teaching materials division, sending shares in the education publisher up by 15 percent after a series of profit warnings.

Employing 35,000 people, the British group provides everything from textbooks to school testing, college courses and online degrees around the world.

But it has been hit in recent years by an improving U.S. economy, which encourages people to take jobs rather than go into higher education, and by students renting rather than buying books, prompting it to issue five profit warnings in four years.

"The measures we are announcing today build on the work completed last year and will allow us to further simplify our portfolio, reduce costs and accelerate our digital transformation," Chief Executive John Fallon said.

Having taken out more than 650 million pounds of cost in two restructuring programs over the last four years, Pearson said on Friday it would strip out a further 300 million pounds ($388 million) a year by the end of 2019.

The savings will come from general and administrative expenses and from North America, it said.

Pearson will also review its U.S. school courseware publishing business, which it said had been slow to switch to digital. It said the division also required high levels of investment and was facing a challenging market environment.

Pearson, which had lost a quarter of its market value in the last nine months prior to Friday's update, said first-quarter trading had been in line with guidance and it reiterated its full-year targets.

Sales in the first three months were up 6 percent in underlying terms, helped by a stronger performance from its North American higher education courseware unit. But it said market pressures on the business were still expected to impact gross sales, primarily in the second half.

Analysts said the plan should boost earnings as the cost cuts come through.

"For 2017 we don't necessarily expect consensus estimates to move significantly but from 2018 onward consensus could move up sharply depending on how proactively the sell side reflects the cost savings opportunity into forecasts," analysts at Citi said.

"Each 100 million pounds of savings assumed in 2018 would add around 20 percent to consensus earnings per share."

However not everyone was convinced. Ian Whittaker, an analyst at Liberum who has a "Sell" rating on the stock, said the pressures at Pearson reminded him of the problems endured by other industries hit by the rapid shift to digital sales.

"To us this looks like the newspapers all over again i.e. continued cost savings and disposals to help shore up profitability while the top-line continually disappoints," he said.

The strong share bounce may help Fallon when he appears at the company's annual meeting later on Friday, facing questions over why he was given a 20 percent pay rise in 2016. ($1 = 0.7737 pounds) (Reporting by Kate Holton; Editing by Paul Sandle and Keith Weir)