Shortterm hiccups will earn 3 cents or 4 cents in the next few years. Significant acreage in an area called sacramento, and real estate is booming. Second one is a simple one, thats called legg mason which i announced yesterday. Legg mason, 164 million shares, down to 128. Every day they announce twothirds of the cash flow is going to buy back stock. Great Cash Generator and theyre solving a lot of their issues. Thank you. What are you bushing barons . You get online happy valentines day, dr. Love. Squawk on the street begins right now. Im melissa lee, with carl quint a nil quintanilla and david faber. Jim cramer has the week off. Take a look at the picture in europe, the focus on the g20 meeting and g7 statements, saying they stand by market determined exchange rates. We saw a bit higher to the euro, above 134 this morning. Japans nikkei surging nearly 2 . The markets in china and hong kong are closed for a second straight day in observance of the Chinese Lunar new year. Apple, in just about 1 hour 15 minutes, ceo tim cook takes the stage at the goldman tech conference. He will unveil a Dividend Increase or buyback. Will he reveal anything about the product pipeline. Were on the ground in san fran. The president set to deliver the state of the Union Address tonight. Will he strike a conciliatory tone or push for more tax hikes. And why will tim cook be sitting next to the first lady. Europe, once again, the laggard with a decline in both volumes and sales. What a quarter for michael kors. Blew out earnings, posted a whopping 41 comp in north america. We begin, of course, with apple. Ceo tim cook set to speak at the Goldman Sachs conference in San Francisco. This comes amid concerns about apple losing Smartphone Market share, a legal challenge in a stock that has fallen more than 30 from its september highs. It is the stock declines that i think puts into focus why apple should do something with the cash fort. Nobody was saying about the cash except it was a nice footnote and that the stockpile was growing, but now theres more pressure on the company. That started with David Einhorn a week ago. The court case, that may be important. It doesnt appear einhorn is getting that many highprofile investors on his side. Others seem to be lining up on the side of apple, if you want to take sides here. But apple is expected to at least give some sense, maybe not today, but in the not too distant future as to what it will do beyond the 98 to 110 billion that it said it needs. It was sometime back when, towards the end of the year, where they indicated that cash between 98 billion and 110 billion on march 10th was the cash balance they had, beyond that was excess. We can expect 37 billion plus from what they take from here. Well see if they do. Theyre taking the challenge seriously from einhorn. I know that. Well see if theres a response. Stocks up 10 from the lows. Interesting that all these narratives are converging today. Theres the einhorn news, theres this watchlike device. There are leaked photos, supposedly, today of the iphone 5 s. Cash is going to be one of the top questions on investors minds. Jon fortt is at the palace hotel in San Francisco this morning. Jon, good morning to you. Good morning, carl. Yeah, so interesting, a year ago, apple was continuing the steepest runup that the stock had seen in about five years. It continued after tim cook spoke at the goldman conference. This time apples coming off the worst month, the worst january that they had seen in about five years. So the conversation going to be little bit different, as you mentioned. Probably having to do with what theyre going to do with their cash. Last year, they talked about china, and labor. Because people were concerned that stories from the New York Times and others could derail apples momentum. Now there are different concerns. People concerned about margins on the iphone and ipad, lower than some people had hoped. Competition, especially from samsung. Just about where the company goes from here. Particularly in emerging markets. Because thats where a lot of the opportunity is. Emerging markets particularly china and brazil, tim cook talked about last year being the markets apple was looking at, particularly china. Apples not doing a lot in brazil in terms of growth. It will be interesting to see what he says about china this time. Last year he was talking about the size of the market opportunity. The number of people who werent yet buying iphones. Now theyre thinking the demographic might be saturated when it comes to the apple products and maybe not as much opportunity as cook was citing last year. Now, apples not the only company presenting here. Ill mention a few of the other big names coming up after cook. They include ebay, broadcom, qualcomm and sandisk. Quite a bit of news expected to be coming out of here, guys. Jon, its interesting, because the Goldman Sachs analyst is one we dont often hear from either, on tv at least. What is your anticipation in terms of how friendly this line of questioning will be and whether or not well get a real push on tim cook on the stocks decline on cash allocation strategy as well as new products . Well, tim cook is a hard man to push. And you dont often see people try to get that combative with him. He sort of has a zen type of approach. Even the combative questions. So i dont expect things to get too contentious. Even if they do, tim cook is likely to sit back and say, well, heres how we think about this. Hes probably not going to be intimidated into giving away apples road map, for instance. I think youll hear him talk about how apple thinks about the technology on the back end to try to get an advantage over competitors innovationwise. He reasonable will be forthcoming how apple thinks about culture and competition. Comes on a day where jpmorgan writes a big piece on the smartphone industry. They cut qualcomm to neutral, because they say were getting closer to the slowing smartphone adoption that we expect in 2014. They see it peaking in the next 12 months. Yeah. Those are interesting stats that run somewhat counter to qualcomms own presentation before analysts just a couple of months ago, i was in san diego for that. I think the real challenge for qualcomm might be competitors like media tech coming in at the low end, trying to sort of come mod tiz android phones. The question is, whos going to get the biggest piece of that pie. Well see a lot of you today, jon. Thanks a lot. All right. Meantime, breaking news on netflix. Well go to Julia Boorstin with the details. Melissa, netflix is partnering with Dreamworks Animation to create the original series for kids. Its based on a movie called turbo opening in july, and it will debut in december in the u. S. And 40 countries around the world. In addition to this deal for the new original series, Dreamworks Animations movies starting with those that are coming out this year, will be available, made available to u. S. Netflix subscribers. This is a very big deal for netflix as it doubles down on the content in kids content. Paying for premium shows with a big name creator. This is also a win for Dreamworks Animation, generates an additional revenue stream, should help them balance out their sort of bumpy earnings results. We dont know the financial terms of this deal, but it cant be cheap for netflix. It could cost Dreamworks Animation hundreds of millions of dollars to create their films. Later this morning, melissa, well be talking to netflixs top officer, and well also bring you everything on cnbc. Com. Meantime, the president s going to give his annual state of the Union Address tonight, marking his Second Opportunity in less than a month to set his agenda for the next term. How can we be a magnet here in the United States for jobs and manufacturing, how can we make sure that our work force has the skills that we need in order to compete, how can we make sure people can earn a living when they work hard, investing in infrastructure, investing in energy, all of those are ways to make our economy stronger. That will be the central focus of the president s remarks this evening. Texas republican congressman randy newbauer joins us on capitol hill. Good morning. Good morning, how are you, carl . Good. A lot of discussion today whether this will be an echo of some called the cockiness, the confrontation of the inaugural. Is that what youre looking for today . I think so. I think what the president laid out in his inaugural address is more taxes, more spending and more government. I feel like were just going to get the details of that tonight. Theres been a lot of discussion about how you go about with a big agenda. Some say its his last chance to go big. When you still have so many economic anxieties at work. Do you think tonights speech will be about jobs and middle class, or will it bleed into guns and immigration . I think it will be a little of both. I think what the president owes the American People is an explanation of why he wants to continue down a road where its not working, we still have high unemployment, one of the worst recoveries weve had ever. This prescription that he has prescribed for our economy, more borrowing, more spending, hasnt really brought about the jobs he said we were going to have. Republicans, on the other hand, are going to talk tonight about how were going to get america back to work, getting government out of the way, and facilitating the American People to get good jobs, and to get this economy back on some kind of a recovery track. Thats going to involve marco rubio, giving the response later on in the evening. To what degree is rubio going to sort of crystallize or illustrate what some are calling a reinvention of the gops image, at least among middle collapse americans . I dont think its a reinvention, i think republicans have always been about empowering people and not necessarily entitling people. In my office in washington, i have a little red wagon that says are you pulling or are you riding. I think what we want is to make sure everybody in america has the tumt to pull their wagon and have the successes and liberties and freedoms available in this country. I think well lay that out tonight with senator rubios remarks. When it comes to specific things regarding the market, there are some reports today, congressman, that he is not going to announce new regulations on Carbon Emissions for existing power plants. How much will you be on the lookout for that, things that affect energy, coal, nuclear, obviously things that have an effect on the rails as well . Well be looking extremely close at that. When you look at the sector, particularly around the country right now, the Energy Sector is really creating a lot of jobs in this country. Particularly in the hydrocarbon area. Despite this administrations continued efforts to try to thwart that. We want to make sure that the president allows america to have an all of the above Energy Strategy in this country, and that we dont have the government picking winners and losers in the Energy Sector. Let the sector choose the jobs, particularly in the oil and gas industry. He could say the keystone pipeline, i think were going to do it. A chance of that . Theres a good chance, that we should do that. If we dont invest in that infrastructure, it doesnt do any good to find all this oil and gas around the country if were not able to get it to the markets, where we can use those energy resources. If he comes across tonight, congressman, not as strident as some say, if its sort of in the middle, if he says when it comes to gun control and immigration, the right and our administration, theres a meeting of the minds. Is that going to be a fair representation of where were at . I dont know. You know, talk is cheap. I think what we need to see is the president jump out there and really show us that he wants to come together and work on some of these solutions. Weve heard him say this in the past. But when it came down to it, it was really basically what the president said was, its either my way or the highway. He wont be able to get much of his agenda done if thats the tone of his speech tonight. Congressman, appreciate your time. Its going to be an interesting evening. Thanks so much. Thank you. Watch the coverage of the president s address tonight 9 00 p. M. Eastern time until 11 00. Well take the response as well. Sir larry will join us, john harwood. It should be an interesting evening. Cocacola reporting profits of 45 cents a share, slightly above street forecasts. Revenues were short of estimates as was global case volume. Earlier on squawk box, the ceo said hes pleased with his companys results. In a world where you have this kind of volatility, to be able to deliver results of growth in earnings, growth in revenue, at 6 , growth in cash, and growth in market share, record market share, and record volumes, i think were pleased. And take a look at the shares of trading in the premarket, down by just about. 4 of 1 . Interesting because they actually added two more brands that surpassed the 1 billion mark. Surprisingly these brands were in japan, not here in the United States. Theyre a green tea product as well as a water product in japan. Which really tells a story of cokes Global Growth strategy, that the next billiondollar brands will be in the overseas markets that are fertile grounds. India slowed, china down, some of the Growth Engines werent there this quarter. Although some of the longterm targets remain intact. Pepsi is ringing the bell. Theyll try to steal a Little Thunder today. Who else is ringing a bell . An actress . Named . Eva. Eva longoria is here, thats right. When we come back, there seems to be no stopping michael kos. Posting a blowout quarter raising guidance for the full year. How long should you ride that rally. Eva longoria, why shes ringing the bell here at the big board. Futures this morning, moderate action. The last couple sessions have been the lightest volume of the year. Both friday and monday. Squawk on the street is back in a minute. Aw this is tragic man, investors just like you could lose tens of thousands of dollars on their 401 k to hidden fees. Thankfully etrade has low cost investments and no hidden fees. But, you know, if youre still bent on blowing this fat stack of cash, theres a couple of ways you could do it. Or just go to etrade and save it. Boom. Michael kors blowing past wall street estimates. 70 increase in total revenue on the search. The stock is up nearly, what, 12 in premarket trading. What gain here. An analyst has a rating on the stock at a 65 price target. Great to speak with you. Good morning. Its hard to find anything bad in this earnings report, or anything concerning. But it if theres anything about the kors story that keeps you up at night, what would it be . I think the one thing were concerned about is the growth margin. It did come a little bit below our estimates. But that is something that does keep us awake at night. I think the inventory in storage, as the brand gets more widespread, and more customer acceptance, you know, were concerned about the level of markdowns going forward. It isnt a problem currently. Right. And talk to me about valuation here. How do you feel about a 36 times forward pe, approximately . The stock is set to open at a fresh record high here. Right. Valuation, it would appear rich. But we think theres a continuing in earnings, estimates going higher following the comments in the Conference Call today. We would expect they would grow into that multiple a little bit. You see a 41 surge in samestore sales in america. You immediately wonder who kors is taking share from. Who do you think kors is taking share from . Well, the obvious culprit would probably be coach. But we do see competitors across the landscape as more apparel manufacturers are getting into the accessories business, including ralph lauren. We did see a lot more of a, you know, much more competitive wholesale environment this quarter. Corinna, would you recommend buying the shares here . It is a little difficult to recommend starting new positions, but we most certainly would be holding on if we did own it already. All right. Great to speak with you. Thanks for your time. Thank you. When we come back, what does art cashin want to hear from the president in tonights state of the union . Hell tell us here at post 9. One more look at futures on this fat tuesday. Well try to let the good times roll when squawk on the street comes right back. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . How do traders using Technical Analysis streamline their process . At fidelity, we do it by merging two tools into one. Combining your customized charts with leadingedge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. We like this idea so much that weve applied for a patent. Im colin beck of fidelity investments. Our integrated Technical Analysis is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. To grow, we have to boost our social media visibility. More likes. More tweets. So, beginning today, my son brock and his whole team will be our new senior social media strategists. Any questions . Since we make radiator valves wouldnt it be better if we just let fedex help us to expand to new markets . Hmm gotta admit thats better than a few likes. I dont have the door code. Whos that . He won a contest online to be ceo for the day. How am i supposed to run a business here without an office . [ male announcer ] fast, reliable deliveries worldwide. Fedex. This is tuesday morning. We open the segment with Duran D