Apple's Shine a Bit Too Blinding

The iPhone maker will report earnings after the bell amid unremitting hype.
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CUPERTINO, Calif. (TheStreet) -- Apple's (AAPL) - Get Report December quarter numbers are set to shine -- huge sales, blockbuster profits, everything one could want. Everything, that is, except continuity.

Apple reports earnings after the bell Monday and if there's one problem ahead -- as any Jets fan knows -- it's that expectations are sky high.

Not only is the gadget shop expected to have sold a record 9 million iPhones and 3 million Macs last quarter, Apple is unveiling its hotly anticipated Tablet Wednesday.

But beyond Apple's stellar fiscal first quarter performance lies a bit of a letdown.

The red-hot holiday sales of the iPhone will cool off this quarter as potential buyers hold off until the next version of the

smartphone arrives

at

Verizon

(VZ) - Get Report

this summer.

Seasonal sales fluctuations are nothing new to Apple or Palm or any consumer electronics shop. But for Apple, which is priced as though sales will continue to grow through the roof, hiccups can seem like seizures.

Much of the implied growth stems from the excitement around the Tablet, which has occupied the imagination of tech fans for a year. These dizzying fantasies will likely peak this week as observers take on a more somber reaction to the Tablet's steep prices, along with fears of potential delays.

For investors, there's good reason to brace for a post earnings stock slump.

"The tablet hype is already priced into Apple shares and investor expectations for the fiscal first quarter are 20% above the high end of guidance," writes Thomas Weisel analyst Doug Reid.

Analysts expect Apple to post earnings of $2.07 a share, based on accounting for iPhone profits spread over two years. Including the iPhone's full profits for the quarter, analysts expect pro forma earnings to be about $3.50 a share.

Sales for the quarter ended last month are expected to be $12.06 billion, according to Yahoo! Finance. That's up 18% from the $10.2 billion level in the year-ago period.

Buyers were soaking up Apple enthusiasm ahead of earnings Monday. The stock is up 3% to $203.35 in late morning trading. Sellers may be wisely putting some of that in the bank for safekeeping.

Reported by Scott Moritz in New York

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