Apple Inc. (AAPL): How A Miss Today Could Trigger A Rally Tomorrow

Apple Inc. (NASDAQ:AAPL)Apple Inc. (NASDAQ:AAPL) bulls better brace for a quarterly miss tomorrow afternoon.

Apple Inc. (NASDAQ:AAPL) bears better brace for a bounce on Wednesday.

No one will be surprised by the consumer tech giant falling short on the bottom line tomorrow.

It’s true that most of the companies that have already checked in this earnings season are holding up well on the profitability front. According to Barron’s, nearly 67% of the companies that have reported this month beat Wall Street’s lowball income targets. However, Apple Inc. (NASDAQ:AAPL) has proven to be the exception to the rule this rally, falling to a 52-week low as S&P 500 and Dow Jones Industrial Average (Dow Jones Indices:.DJI) raced to all-time highs earlier this month.

It’s not just the share-price momentum that’s bucking the trend. Apple has missed more often than not under Tim Cook’s tenure, including falling short in two of the past three quarters.

Analysts also continue to get spooked by troubling retail channel checks and gloomy snapshots provided by Apple suppliers.

Even when the news is good on the surface — for example, when Verizon Communications Inc. (NYSE:VZ)‘s quarterly report last week showed that more than 55% of the smartphones it sold during the first three months of the year were iPhones — it’s still ugly for Apple’s bottom line once you dig deeper. Just half of those 4 million smartphones were the high-margin iPhone 5 handsets. Too many Verizon Communications Inc. (NYSE:VZ) Wireless customers went for the cheaper iPhone 4 and iPhone 4S smartphones that Apple Inc. (NASDAQ:AAPL) sells at lower price points on leaner markups.

However, the biggest reason to brace for miss is probably where pro projections are heading. Let’s go over the past three months of Wall Street profit targets.

Date EPS Estimate
Today $10.07
7 Days Ago $10.12
30 Days Ago $10.18
60 Days Ago $10.24
90 Days Ago $11.84

Source: Yahoo! Finance.

Analysts continue to scale back their forecasts, and that’s important. The freshest estimates consist of lower revisions, so one assumes that the higher estimates are probably the stale ones.

A lot of tech companies had analysts hosing down their outlooks only to beat the watered-down expectations earlier this earnings season, but the smart money has to be on an Apple Inc. (NASDAQ:AAPL) miss here.

The important thing for investors to remember is that a miss won’t necessarily send the stock lower.