(Adds commentary)
April 12 (Reuters) – Google Inc announces its board
has unanimously approved a dividend of new, non-voting stock to
existing shareholders that it called a stock split, effectively.
It said the move was designed to preserve a structure that lets
co-founders Larry Page and Sergey Brin exert heavy influence
over the corporation.
The Internet search leader also posted first-quarter revenue
of $8.14 billion, roughly in line with Wall Street’s
expectations after a rare miss in the previous quarter.
COMMENTARY:
WHIT ANDREWS, ANALYST, GARTNER
“The popular kid at the party is the one that gets to have
his cake and eat it too.
“One of the values of Google is that Larry and Sergey know
best. What this (stock dividend, split) allows them to do is
expand their stock base while maintaining control. That’s my
first read of this.
“The Street is certainly very happy with Larry and Sergey
and this is the time for them to say: ‘We’re glad you are happy
with us and we’ll try to get money back to you and trust us.'”
COLIN GILLIS, ANALYST, BGC FINANCIAL
“This is just an okay quarter. It’s not great. The EPS-beat
all came from a lower-than-expected tax rate, so the quality of
earnings is poor.
“Plus, you have another quarter with a disturbing drop in
click prices. Okay, paid clicks are up but people are paying
less for them. We had smartphones before the December quarter.
If we want to blame it all on smartphones that’s a little
disconcerting.
“And of course we still have Motorola in front of us, which
is going to wreck margins.
“And this stock split dividend, a dividend of non-voting
shares, is really just so the company can maintain control.
RONALD JOSEY, ANALYST, THINKEQUITY
“Paid click growth was strong, CPCs were weak, but we’re
overlooking the CPCs given the overall growth in revenues and
growth in paid clicks, which are more important.
“It’s a good quarter, in line. A lot of people were fearful
heading into this.”
STEVE WEINSTEIN, ANALYST, ITG INVESTMENT RESEARCH
“The stock split has nothing to do with the fundamentals of
the business. In theory, it makes the stock more accessible to
smaller investors. I don’t think it’s material.
“There are not a ton of surprises here (in the quarter), it
may be a little bit better than expected. Costs have been well
controlled.
“We’re seeing a continuation of a trend where there is very
strong growth in clicks but we’re seeing a decline in pricing.
There’s a combination of growth coming from lower margin areas
such as mobile, display, emerging markets.”
(Reporting by Noel Randewich in San Francisco, Liana Baker and
Jennifer Saba in New York)
