"The only relevant number is going to be the number of iPhones sold," Apple analyst Charlie Wolf of Needham & Co. told DailyFinance. "Nobody cares about the iPod, and they've already hit their Mac guidance."
Apple is expected to announce earnings of $1.42 a share, a 13 percent annual increase, paired with a 17 percent increase in revenue to $9.2 billion. But many on the Street are looking for a so-called "whisper number" of around $1.60 per share. Among those looking for a "blockbuster" quarter is CNBC's Jim Goldman, who this morning gushed about what a "dynamic money-maker this company is, and what a jewel it has become in American business history."
Others, like Needham's Wolf, are concerned that Apple may disappoint.
"Gross margins may be down, which could come as a surprise to some investors who are ignoring the fact that Apple reduced the price of its notebooks last quarter," Wolf said. "Also gross margins on the Mac line are down materially from the third quarter. But if they sell enough iPhones, which have a high gross margin, that could compensate."
Wall Street is looking for Apple to report having sold 7 million new iPhones, but Wolf is somewhat skeptical the company will hit that number. Among other things, the company has had supply-chain problems, and has literally been having trouble keeping up with demand for the new iPhone 3G.
RBC's Mike Abramsky predicts the company has sold 7.5 million iPhones this past quarter, a 9 percent annual improvement and a 44 percent quarterly boost, while respected independent analyst Andy Zaky is looking for 7.3 million. But Wolf is not so sure.
"Because the installed-based is still relatively new, Apple would have to have acquired a large number of new users to hit a number like 7 million," Needham said. "I think they're going to get there, just not this quarter."
As a result, "the probability of disappointing is greater than 50 percent," Needham said.
Other analysts are more optimistic. Broadpoint AmTech analyst Brian Marshall said he expects Apple's winning streak to continue.
"Apple is the best technology company on the planet, and I continue to be bulllsh on this stock," Marshall told DailyFinance. He's predicting earnings per share of $1.66 for the quarter on 7.2 million iPhones sold. "My price target is $210, but I could raise that after strong earnings today," Marshall added.
Apple shares are up more than 100 percent since January and were trading just under $188 in pre-market action Monday. If the company does not meet expectations, look for a sell-off.
Apple's earnings report comes just hours after Verizon and Google previewed their forthcoming assault on the iPhone, the new Droid device, which is powered by Google's (GOOG) Android open-source mobile operating system.
