NEW YORK
Investors digesting Google Inc.'s 61-percent jump in first-quarter profit and the online search company's plan to split its stock sent shares slightly higher in premarket trading Friday.
Google reported profit of $8.75 per share in the January-March quarter, or $10.08 per share when excluding one-time items. Revenue increased 24 percent to $10.65 billion, or $8.14 billion after subtracting ad commissions.
That topped Wall Street expectations. Analysts polled by FactSet expected adjusted profit of $9.66 per share on revenue, excluding the commissions, of $8.09 billion.
Jefferies analyst Youssef Squali said in a client note that the company's results reflect a "very healthy demand" for online ads and e-commerce. He maintained a "Buy" rating and raised Google's price target to $850 from $825.
The company's plan for its stock, expected to win shareholder approval in June, would give current shareholders one share of the new, non-voting Class C stock for each share they now own. The plan would both effectively split Google's stock price in half and help Google's senior leaders keep control years from now.
Citi Investment Research's Mark Mahaney said that the move could prompt more individuals to buy the stock, but paying a dividend would be a "real shareholder wealth creation step." Mahaney said he doesn't see that happening for several years.
He has a "Buy" rating and $750 price target on the shares.
Google stock added $3.59, or less than 1 percent, to $654.60 before the market opened Friday. Shares closed up $15.05, or 2.4 percent to $651.01 Thursday before the Mountain View, Calif., company released earnings results.
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