Apple earnings overshadow Jobs announcement

January 18, 2011 12:00:00 AM PST
A new earnings report from Apple has over-shadowed the news that founder and CEO Steve Jobs is taking a medical leave. Jobs was still at the helm when Apple customers snapped up far more iPad than analysts had predicted, making for a record fourth quarter with $6 billion in profits -- a 78 percent increase from last year.

Apple could not be in better shape financially. It is making so much money, it is sitting on almost $60 billion in cash. In fact, Apple could single-handedly cover the state budget deficit -- twice.

While Wall Street worries about Steve Jobs and the public worries about finding or keeping their jobs Apple is an engine running on all cylinders.

Record revenue of $26.7 billion and record earnings of $6 billion came during a holiday season when no one was sure if consumers had shrugged off the recession. Sales jumped 23 percent for Mac desktop and laptop computers, compared to the year-ago holiday period.

iPhone sales were up 86 percent. The only weakness was a 7 percent decline in iPod sales.

"I think consumers want products that work and consumers want products that fit into their lives and do what they want them to do and I still see Apple continuing on that promise and I think because of that, consumers will still enjoy and use those products," tech analyst Ben Bajarin said.

While Jobs is widely considered a visionary and creative genius, Bajarin points out that Emeryville's Pixar animation studio, co-founded by Jobs, has continued to thrive after he sold it to Disney in 2006. Credit has to go to talented people he put around him and so it is with Apple.

Shervin Pishevar is the founder and executive chairman of social game maker SGN. SGN has sold 30 million games for the iPhone through the Apple App Store. He believes Apple will keep on track despite Jobs' absence.

"It doesn't cause any concern in terms of where Apple's going or the marketplace or any kind of risk that way because it's already so well developed and it's growing so fast that it's even beyond Apple itself," Pishevar said.

Tim Cook, Apple's chief operating officer, who is filling in for Jobs, tried to emphasize that during a post-earnings announcement conference call.

"The team here has an unparalleled breadth and depth of talent and a culture of innovation that Steve has driven into the company, and excellence has become a habit," Cook said.

On that same call, Apple executives did not provide any details of Jobs' health problem or when he might return.

Apple shares fell 2 percent Tuesday but have re-gained about 1.5 percent in after-hours trading after the financial report came out.