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Will Apple Miss Earnings Estimates?

NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) reports earnings on Tuesday, July 24.

In recent weeks, an analyst here or there has expressed caution in anticipation of the company's Q3 earnings release.

For example, as Apple scribe Philip Elmer-DeWitt noted in Fortune last week, Brian Blair at Wedge Partners thinks if the consensus estimate for iPhone sales in Apple's Q3 comes in at "31 million units or higher" he "would be cautious" on the stock at least in the near-term. While Blair thinks the iPhone number will land between 28 million and 30 million, other estimates run the gamut from a low of 27 to a high of 38.5 million.

Also, Elmer-DeWitt's survey reports the average estimate of professional analysts is 29.54 million iPhones vs. 31.17 million for independents, who tend to be more bullish and less cautious re: AAPL.

Late last month, TheStreet's Chris Ciaccia relayed a similar hint of near-term bearishness from JPMorgan Apple analyst Mark Moskowitz:
[Moskowitz] expects Apple to report fiscal third-quarter earnings of $10.20 per share on revenue of $36.8 billion. The average estimate of analysts polled by Thomson Reuters is for a profit of $10.33 per share in the quarter on revenue of $37.33 billion.

Like most others expressing Q3-related caution, Moskowitz chalks up his concern to lag time between iPhone 4 and 5. Once the next iteration of the device hits sometime this fall, Moskowitz sees the forecast improving. In fact, even though he's concerned about fiscal Q3 and the current fiscal fourth quarter (July-August-September), Moskowitz rates AAPL "overweight" and expects shares to hit $695 by December, just $20 lower than his previous estimate of $715.

Last quarter, Apple guided down expectations for Q3, putting revenue estimates at $34 billion and EPS at $8.68 (numbers courtesy of my feed). Of course, a low-ball estimate from Apple should surprise no one. That tends to be standard operating procedure. Briefing reports Capital IQ analyst estimates, which, as of Monday afternoon, came in at roughly $37.4 billion and $9.95. Typically, Apple blows both numbers away.

If there was ever a risk of the company missing consensus and flirting too closely with its own guidance, it's the upcoming fiscal Q3, forthcoming fiscal Q4 report (due in October) or both.

The last time Apple missed analyst consensus estimates (but crushed its own guidance) was fiscal Q4 2011. EPS for that period came in at $7.05, while analysts expected $7.27 and management had issued downside guidance of $5.50 on its previous report. Revenue totaled $28.2 billion vs. consensus estimates of $29.3 billion and company guidance of $27.6 billion.
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