Apple exec is usually hands-on

Following the disclosure on Monday that Apple CEO Steve Jobs will be taking his third medical leave in six years, Apple shares fell 4% in early trading on Tuesday, or $14 to $334.35.

Since the markets were closed on Monday due to the holiday, this is the first glimpse at how U.S. investors are reacting to the news. Some analysts late on Monday had predicted shares could fall by 10% in early trading. Apple is expected to release its quarterly earnings after the market closes on Tuesday.

“The knee-jerk reaction for a stock like Apple would be to buy on dips and that would certainly be following the advice of most analysts this morning,” BTIG analyst Walter Piecyk said in a note Tuesday morning.  “The chorus of buy on weakness calls could certainly temper the sell off today in front of a quarter when, as usual, the consensus is well above guidance.  That sets up for a pretty risky 24 hours given how the stock has reacted in the past from slight deviations in items like gross margins and units not to mention the risk of any commentary on the call that provides more details about Jobs’ health or the coming quarter.”

The consensus on Wall Street is that it will be a stellar quarter, with analysts expecting revenues to grow by 55% to $24.3 billion. Gains are due to strong sales of the iPhone and iPad in the quarter ending Dec. 31.

In the past year, investors have traded Apple shares up 62% to $348. Clearly, shareholders will be watching closely how the market reacts to the Jobs news today, and how the financial report may impact shares in after-hours trading. (U.S. markets were closed Monday in observance of the Martin Luther King Jr. holiday.) Apple shares fell by 9% on Monday on the Frankfurt exchange.Jobs, who has taken a medical leave of absence, will retain his title of CEO and said he would continue to be involved in major strategic decisions for the company — but chief operating officer Tim Cook will be responsible for day-to-day operations at Apple.

“I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011,” said the 55-year-old Jobs in an email sent to employees. “I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.”

The short-term effects of Jobs’ departure will be minimal, since many products, such as the expected update of the iPad tablet and annual refresh of the iPhone and iPod lines, are far along the development path.

However, if this absence becomes a prolonged one, investors (and, perhaps, content partners) likely would start to worry. Jobs is very hands-on with the company’s strategic direction, and a permanent departure from the company could be seen as a major hurdle, despite Apple’s deep bench of talent.

The other question on showbizzers’ minds is what the uncertainty of Jobs at Apple means for Disney, where Jobs is the largest shareholder.

“From a financial perspective, not much,” said David Bank, an analyst at RBC Capital Markets. “From a strategic perspective, I am not sure that it means much either. Disney doesn’t need much from Apple. Disney has the content that Apple and everybody else wants. (Disney CEO Bob) Iger and Steve have a close relationship, but from a corporate perspective, I am not sure it reaches beyond that right now, since I don’t think Disney is ready to give Apple any subscription content, which is the holy grail for Apple or anybody else looking to break into the ecosystem.”

AppleTV still is considered a “hobby” for the company, but Jobs has been talking regularly with studios and networks to increase the level of content on the service — as well as on the iPad and iPhone.

 “It meant more when Apple needed video content to launch the iTunes video store, but that’s when Disney was ready for a la carte rental and ownership,” Bank said. “The next move is a whole new ballgame — subscription. It’s going to take a whole lot more than relationships to see that happen.”

Jobs’ health troubles have taken a toll on Apple shares in the past, as he is revered as the driving force behind the company’s storied run of hits over the past decade. On Jan. 14, 2009, Jobs took a six-month break from the company to undergo a liver transplant. The stock dropped 10% the next day. On Aug. 1, 2004, he announced he had been diagnosed with pancreatic cancer. The next day, Apple’s stock dropped 2.3%, and eased 8% by week’s end

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