Googlereported first-quarter earnings that beatWall Street's expectations on Thursday, while revenue was in-line with expectations.
The company also announced plans to create a new class of non-voting capital stock, which will be listed on the Nasdaq Stock Market, in what is essentially a dividend its paying to shareholders — in stock form.
The announcement, which came in the form of a "founders' letter" from CEO Larry Page and co-founder Sergey Brin, came as Page completed a year after his return as chief executive. (Click to read the full text of the letter.)
Under the new plan, the owner of each existing share will receive one new share of the non-voting stock, the company said. This will give investors twice the number of shares they had before in what is effectively a two-for-one stock split — though this new class is nonvoting.
Google said the split is something investors have been asking for. In addition, employees given Google stock in the future will get the non-voting share, allowing voting power to remain with existing shareholders.
But the buzz on thetrading flooris that this stock split is not the type of dividend that investors had been hoping for.
"The stock split has nothing to do with the fundamentals of the business," said Steve Weinstein, an analyst with ITG Investment Research. "In theory, it makes the stock more accessible to smaller investors. I don't think it's material."
Earnings excluding items rose to $10.08 per share from $8.08 a share in the year-earlier period.
Net income was $2.89 billion, compared with $1.80 billion in the year-ago period
Revenue was $8.14 billion, a 24-percent increase from $6.54 billion a year ago.
Analysts had expected the company to report earnings excluding items of$9.65a share on $8.15 billion in revenue, according to a consensus estimate from Thomson Reuters.
"There are not a ton of surprises here (in the quarter), it may be a little bit better than expected," he added. "Costs have been well controlled."
In the previous quarter, Google stunned Wall Street with a rare miss of analysts' profit and revenue expectations, driving its stock down more than 10 percent. (Click here to get after-hour quotes for Google.)