Although the company in January posted the best earnings in its 32-year history, the Q1 report is remembered by investors as a disaster. In the weeks that followed, Apple (AAPL) shares fell more than 40 points — from above $160 to below $120 — knocking $36.5 billion off the company’s market capitalization. Recession fears were a big factor in what turned out to be a three-month bungee jump, but what really spooked the market was Apple’s Q2 earnings guidance: 94 cents per share, nearly 15% below the Street’s average estimate of $1.09. [Reader “Mick” points out that hedge funds dumping Apple to prop up their shaky financial positions played a major role in the sell-off. He notes that institutions held 71% of Apple’s shares before the plunge and 68% after.]

So there are two things to watch for on Wednesday: 1) Apple’s sales figures for Q2, which should be stellar, and 2) what kind of guidance it gives for Q3, which is anybody’s guess.

All signs point to an excellent second quarter for Apple. The consensus of analysts surveyed Monday was looking for the company to earn $1.07 a share on $6.95 billion in sales, versus the company’s guidance of $0.94 on $6.8 billion

Strong sales of MacBooks led the quarter. IDC last week reported that, although growth in overall PC sales in the United States slowed last quarter to just 3%, Apple’s computer shipments were up 25.1%. Gartner, using slightly different methodology, reported Mac sales up 32.5%.

If Apple’s worldwide performance is anything like its domestic record, the company should easily beat the Street’s consensus of 1.95 million Macs sold in the quarter. Piper Jaffray’s Gene Munster is looking for Mac sales of 2-2.1 million; JP Morgan’s Mark Moskowitz expects them to come in even higher, at 2.11 million. Either number would represent a near doubling of sales in just two years, as Ars Technica’s handy bar graph shows.

The iPod picture is not quite as rosy. There is sure to be sharp seasonal falloff from the Christmas quarter, when Apple shipped 22.1 million units. JP Morgan’s Moskowitz estimates that Apple sold 9.68 million iPods in Q2; Piper Jaffray’s Munster is calling for somewhere between 10 to 10.5 million, reflecting a sales spurt late in the quarter sparked by a sharp price cut on the low-end iPod shuffle. According to Munster, the Street has already decided that the iPod’s days of growth are behind it, and that the consensus is looking for sales of just under 53 million iPods in 2008 — essentially unchanged from 2007. Munster’s more optimistic; he believes the iPod will evolve over the next 12 months from a stand-alone music player into a mobile Internet device that fits in your pocket, and he’s looking for iPod sales to grow 10% year over year.

iPhone sales are harder to predict, given the spot shortages in the United States, excess inventory in Europe, and a chaotic black market in jailbroken iPhones in Asia and the developing world. Analysts’ estimates are all over the lot. Moskowitz and Munster (to pick on those two one more time) differ by half a million units. Moskowitz expects Apple to report sales of 1.5 million iPhones; Munster is looking for 1.6 to 2 million. Charles Jade at Ars Technica‘s Infinite Loop speculates that the release date of the 3G iPhone may hinge on what the actual number turns out to be. He writes:

With a prediction of 10 million iPhones sold in CY 2008 … Apple must sell, on average, 2.5 million iPhones per quarter. … If the iPhone sold less than 2 million units this quarter, expect a 3G iPhone sooner rather than later. Conversely, if the current shortages are a result of insatiable lust for the greatest phone ever made, expect Apple to milk that cow for all it’s worth before introducing a new model. (link)

When it comes to pricing Apple’s shares, however, Wall Street cares less about the past than the future. The guidance Apple gave last October hinting at a blowout Christmas surprised analysts and help drive the stock to a record $200 a share in December. Although Apple beat everybody’s expectations for the quarter, by the time the first quarter results came out, traders were focused on Q2. And when Apple shocked analysts in January with surprisingly pessimistic guidance, it triggered a 40 point fall.

Investors, some of whom lost millions in the debacle, were furious, and Apple was besieged by angry threats and e-mails. (“Straight out, bald face, criminal lying,” was how one described Apple’s Q2 guidance). Few expect the company to respond such complaints by sweetening its numbers; if anything, it is more likely to offer no guidance at all, especially for a quarter that is so hard to call. Although investors can look forward to a new iPhone and software developers kit in June, back-to-school sales in late summer, and Christmas sales before the end of the year, none of those expectations will show up in Q3 earnings.

If Apple does offers Q3 numbers, they are sure to be, as always, conservative. Apple, more than most companies, likes to make only promises it knows it can keep. But despite recent complaints, the fact is that its results do tend to track its guidance. The spreadsheet at left, produced by a member of TMO’s Apple Finance Board who calls himself “awcabot,” shows guidance and results quarter by quarter since 2002. Past performance is no guarantee, but over that time, revenues have exceeded guidance fairly dependably by an average of 5.7% and earnings by an average of 43.8%.

Take all this for what it’s worth. Apple is a volatile stock, and it’s especially volatile before and after earnings reports. We may not be in for another bungee jump, but for the next few days it could be a bumpy ride.