The Street awaits Apple’s Q3 earnings

Analysts issue a flurry of last-minute adjustments in advance of Tuesday’s quarterly report

Apple’s (AAPL) one-two punch — Steve Jobs’ “Antennagate” press conference Friday and the company’s Q3 earnings report scheduled for Tuesday — left analysts struggling to stay on top of two competing narratives.

On one hand they had the firestorm of negative press coverage that helped carve nearly $30 billion out of Apple’s market cap over the past three weeks — and which Jobs may or may not have effectively silenced with a mea culpa and a free case.

On the other they were looking forward to what everybody expects to be record third-quarter earnings — earnings that have nothing to do with the iPhone 4’s external antenna and everything to do with things like gross margins and unit sales.

For the past few weeks we’ve been gathering Q3 estimates from a broad cross-section of analysts for our quarterly professionals-vs.-bloggers analyst smackdown. We’ve pasted that spreadsheet below the fold. Suffice to say that everybody is expecting robust year-over-year revenue growth — anywhere from 48% to 69% — with the amateurs 6.5% more bullish than the pros.

Meanwhile, we’ve received a flurry of last-minute notes from analysts adjusting their estimates and trying their best to reconcile those two narratives. A sampling of what they had to say is pasted below the spreadsheet.

Revenue in billions. Unit sales in millions. Click to enlarge.

Excerpts from those last-minute analyst notes:

Bank of America/Merrill Lynch’s Scott Craig: Plenty of coals in the fire. “Consensus estimates call for EPS to decline 7% Q/Q in F3Q10 to $3.09 from $3.33, which we view as very conservative under almost every scenario, and compares to our $3.42. …Our worst case scenario yields $3.33 of EPS and our best case is $3.77.”

RBC Capital’s Mike Abramsky: Reiterating Outperform. “Strong Q3 results/guidance may help mitigate recent iPhone4 reception concerns. Our Outperform thesis remains that there are still large market opportunities ahead (iPad, iPhone, Mac, other innovations).”

Cowen’s Matthew Hoffman: iPad Upside Likely. “We model that iPhone 4 issues will trim gross margins by 80 bps in F4Q10, but see iPhone 4 demand remaining solid and upside depending on the effectiveness of Apple’s response to perceived reception issues. iPad also continues to remain supply constrained, suggesting that ramp is ahead of our previous estimates.”

Bernstein Research’s Toni Sacconaghi: “The immediate-term question for Apple and investors is whether the company may be incrementally more cautious in its revenue and EPS guidance given potential lingering issues from “Antenna-Gate.” We had anticipated that Apple might guide less conservatively that usual for FY Q4, given the potential for very strong iPad and iPhone shipments, but are less certain that may be the case.”

Think Equity’s Rajesh Ghai: iPhone4 Uncertainty Eliminated. “While Friday’s press conference may not have satisfied everyone, we believe AAPL stock could benefit from elimination of uncertainty surrounding a possible iPhone4 recall. We expect AAPL to announce upside to Street consensus on Tuesday driven not just by the iPad and iPhone4 but by higher-than-expected Mac sales which we believe could be a positive outcome of the strong foot traffic at Apple stores caused by recent product launches.”

BMO Capital’s Keith Bachman: Humble Pie. “We believe the press event was helpful in addressing the antenna issue and lowering the wrath of the press… We remain OUTPERFORM on AAPL. We believe that unit/revenue/EPS upside exist for the September and December quarters, driven by iPhones and iPads.

Deutsche Bank’s Chris Whitmore: A Tempest in a Teapot. “In aggregate, we view the antenna issue as wildly overblown and we expect it to pass, creating an opportunity for investors. The financial impact of the bumper offering is ~$16-70M to Apple and simply not material to Apple financials. Looking forward, we expect multiple, simultaneous new product cycles (iPad, Mac and iPhone) and further international penetration to drive strong growth and profits over multiple quarters.”

Sterne Agee’s Vijay Rakesh: Expect a Solid Guide Despite the Recent Headlines. “We believe gross margins for AAPL should trend slightly higher given new product introductions with the iPad and continued strength in the Mac Notebook line.”

Morgan Keegan’s Travis McCourt: Free Case Not Material To Financials. “All this being said, this is certainly a black eye for Apple, and blaming the antenna issue on industry wide problems is probably not the most elegant way to accept blame. However, we doubt that this issue will have a material impact on iPhone’s growth, and the free cases offered will likely be immaterial to earnings (far less than 1% of EPS.)”

Morgan Stanley’s Katy Huberty: Investment Conclusions. “We see three potential catalysts that can help shift investor focus back to Apple’s long-term fundamental story: 1) Stronger than expected June EPS (next Tuesday post market close) in light of lowered buy-side expectations, 2) Improved quality / supply of the iPhone in late 3Q/4Q, and 3) Stronger than expected iPhone and iPad units + upward margin trend driven by mix in C2H10.”