Apple's Margin Massage

Apple(AAPL Quote) has had a great run since an unexpectedly strong third quarter rekindled investor enthusiasm.

The stock has soared by nearly 40% in about three months, while the Nasdaq has appreciated by just 13%.

So with the computer maker poised to report fiscal fourth-quarter earnings after Wednesday's closing bell, investors are wondering if another strong quarter can elevate a stock that's within 20% of its all-time high.

The answer: yes, though immediate gains may not be great, and Apple's share price can be rather volatile around earnings time.

Standard & Poor's analyst Richard Stice, for example, downgraded the stock last month. But Stice is hardly an Apple bear. He cut his outlook to buy from strong buy, but he still sees decent appreciation in the coming period.

The back-to-school buying rush likely bolstered the fourth quarter --- Stice says he'd like to see double-digit gains in Mac sales -- while the holiday shopping season will carry the first quarter.

Moreover, Apple will probably gain from a new version of its operating system expected early next year and will be helped by its refreshed iPod line.

Analysts polled by Thomson First Call are expecting a fourth-quarter profit of 51 cents a share on revenue of $4.66 billion. In the year-ago period, the company earned 38 cents on $3.68 billion in revenue.