By Philip Elmer-DeWitt
October 19, 2009

What’s Wall Street expecting this quarter? The 22 analysts we polled are all over the lot

Merck, McDonalds, Microsoft, Boeing, Coca Cola, Dupont and AT&T are among the bellwether companies reporting earnings next week, but when the markets close on Monday, all eyes will be on Apple (AAPL).

Wall Street blows hot and cold on Cupertino. Apple shares have been on fire for most of the year, and after see-sawing for much of the day they rose up sharply in late afternoon trading to close at $189.86, up 0.96%. The stock has rocketed more than 120% since January, outpacing the Dow by nearly 9 to 1 and leaving analysts scrambling to keep up. Nearly all have adjusted their estimates in advance of Monday’s report, some rather dramatically (one of them raised his price target from $70 a share to $250 in the space of seven months).

Apple analysts scramble to catch up

With the stock hovering within 10 points of its all-time high ($202 per share, set nearly two years ago), the question for many traders is whether it has much further to go — which is one of the reasons they’ll be closely watching Monday’s earnings report.

The Street is looking for Apple to earn $1.42 a share on revenue of $9.2 billion, according to Thomson Financial’s consensus, although the revenue estimates of the 20 analysts we polled ranged from $8.37 billion to $9.72. That’s a difference of $1.35 billion — enough to fund a small land war — but this time the most optimistic estimates come from big Wall Street firms, not the unaffiliated analysts who have tended in the past to be the most bullish on Apple.  (See chart below the fold.)

The biggest discrepancy in the chart below is the column showing estimated iPhone unit sales. Since June, when Apple introduced the iPhone 3GS and lowered the iPhone 3G’s price to $99, the company hasn’t been able to make the things fast enough to meet demand.

Whether that is good news or bad remains to be seen. The bulls are looking for Apple to report sales of 7.5 million to 8.02 million iPhones — numbers that would both boost its revenue and sweeten its gross margins. The bears are expecting unit sales in the range of 5.2 million to 6.0 million. If the numbers are that low, you can expect the stock to get clobbered in after-hours trading.

Will iPhone sales disappoint investors?

Another number to watch Monday is Apple’s so-called non-GAAP revenue, especially now that the generally accepted accounting principles (GAAP) rules have been rewritten to allow the company to book revenue from iPhone sales as it comes in, not spread out over two years. Not every analyst publishes non-GAAP revenue numbers, but those that do are looking for them to come in somewhere between $10.4 billion and $11.65 billion. Anything more than $11 billion — even though that’s less than the “truly stunning” $11.68 billion Steve Jobs reported last year when deferred revenue for the original $599 iPhones were still pouring in  — would probably be considered a pretty strong showing.

Apple’s gap is closing quickly

Finally, there’s Apple’s guidance to consider, which as usual is anybody’s guess. Piper Jaffray’s Gene Munster, for one, is expecting Apple’s predictions for the December quarter to be typically conservative. He’s looking for them call  for earnings-per-share around $1.68 (12% below the Street’s $1.91 consensus) on revenues of  $10.98 billion (4% below the Street’s $11.44 billion).

A guide to Apple’s guidance

After falling nearly two points in early morning trading, Apple bounced back at $189.86, up 1.81 points (0.96%). The company’s shares had closed Friday at $188.05, down 2.51 points (1.32%), and fell another 0.45% in after-hours trading. Traders may have been spooked by one analyst’s report — given prominent play on cable TV Friday night — that production “hiccups” could have cut into iPhone sales last quarter. (See here.)

Below: The published estimates of 19 professional analysts — updated to include several reports issued Monday morning — and three closely-watched independents. To find out who was closest to the mark, check in here after the markets close.

Apple is scheduled to report its earnings for fiscal Q4 and 2009 after the markets close Monday, Oct. 19. A conference call with analysts is scheduled to begin at 5 p.m. Eastern (2 p.m. Pacific) and will probably last about an hour. Tune in here for our analysis.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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