Awaiting Apple’s 4Q Results: Will They Meet Investors’ Moving Target of Expectations?

Apple Inc. (NASDAQ:AAPL) will report its December quarter results today and the company’s key issue might be their capability to hit the constantly changing target of expectations by investors. This reporting period will include the new iPhone 4S that went on sale in October. It was also available free to users who signed a two year contract for the first time during this period. Since Apple’s last earnings report, its stock has constantly fluctuated.

Apple forecasts a revenue gain of 38 percent compared to last year. Actual results will be a key metric watched by analysts, several of whom expect shipments to be between 30 and 32 million. The iPad will also be watched closely. The tablet device is likely to have soaring sales during the past holiday shopping season. “The critical number is going to be the iPhone number,” said Gene Munster of Piper Jaffray, who recently increased his own iPhone unit forecast from 26 million to 30 million. Munster feels that Apple achieving the 30 million mark would sustain his idea that more than 90 percent of iPhone customers will upgrade rather than choose a new brand of smartphone. It would also mean that the iPhone 5, due out this summer, could be a “monster upgrade,” Munster said.

Apple has to get through the next months and meet high expectations from investors and Wall Street. Analysts predict about 30 million iPhones will ship in the quarter and iPad between 13 to 14 million will ship. “We are expecting a very strong quarter from iPhone with upside to our 30 million unit estimate,” wrote Maynard Um of UBS in a note to clients on Friday.

The iPad predictions are still unknown. The device has led the tablet market since its launch in 2010, but now faces the Kindle Fire as a serious competitor. Apple is expected to reveal an iPad 3 in the next weeks. “Twelve million units would reflect just an 8 percent unit growth for iPad [quarter-over-quarter] in the holiday quarter, which we believe is a relatively low hurdle for the company,” Um wrote.

“We model iPad sales to be down 25 percent quarter-over-quarter on account of a potential iPad refresh in March; however, Apple could guide conservatively, particularly if — like the iPhone4S — the refresh takes place in April (or the end of March) rather than early March,” Sacconaghi wrote in a report.