We start the day with Citi coming short of expectations in its fourth-quarter results. Citi shares had been gaining ground in recent days, moving past the $5 a share price level only last week as JP Morgan reported better-than-expected results. The Citi may never sleep, but it is not exactly in the same league as JP Morgan.
As important as the Citi results are, the buzz today is expected to center on Apple, which reports after the bell. But the earnings story appears to have been overtaken by news of Steve Jobs’ sick leave. This brings back concerns about Mr. Jobs’ health given his background. A number of analysts are emphasizing Apple’s deep bench of management talent; implying that Mr. Jobs’ absence wouldn’t mean much.
But let’s not kid ourselves here. Steve Jobs is front and center to Apple’s product strategy. And it goes without saying that filling those shoes wouldn’t be easy, even on a temporary basis.
Apple has had an impressive run thus far. A lot of it is no doubt attributable to its own brilliance. But how can anyone deny that Apple has had the good fortune of dealing with a fairly inept group of competitors? How else can one explain the almost year-long lead in the iPad release? But with a number of competing tablet products hitting the market this year, Apple will finally start facing some credible opposition in a key growth product category.
And then there are the lingering questions about the company’s cash pile of about $50 billion. Apple may be very good with creating and marketing consumer products, but that skill may not extend to managing money — particularly in this low interest rate environment. Shareholders would be perfectly justified in asking what Apple planned to do with it.
Sheraz Mian
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