Apple's recession report card arrives Wednesday

Correction: This post initially misstated Apple's revenue guidance for the quarter. The midpoint of the range was $7.8 billion.

Does Apple have one more earnings surprise up its sleeve?

This week will supply a telling sign of the tech industry's economic health. Intel hinted last week that the worst was over, while Google was more cautious. Now, all eyes will be on reports from a parade of tech bellwethers--including Microsoft, Yahoo, Amazon, and IBM--for signs that the tech economy is indeed on the road to recovery.

But Apple's earnings announcement Wednesday may be the most closely watched of the tech reports. So far, the company has shown a remarkable ability to navigate through the storms that have dinged virtually everyone else in this industry. Apple's stock is up 24 percent over the last month as investors anticipate another strong quarter from the company. Now the question is what's next.

Financial analysts are expecting Apple to record $7.9 billion in revenue for the period that ended in March, its second fiscal quarter, and earnings per share of $1.09. That compares with the company's own guidance for the quarter of $7.8 billion in revenue and earnings per share between 90 cents and $1.

If Apple matches the analyst estimates, it will have recorded a 6 percent increase in revenue and a 6 percent decline in earnings per share, proving that no one is recession proof. But as anyone who follows Apple's financial performance knows, the company is notorious for providing guidance way below the mainstream estimates, and then dramatically surpassing that guidance 90 days later.

Will it pull off that trick one more time on Wednesday? Judging by what we've seen from its three major divisions over the last three months, Apple is likely to announce another quarter of solid results, combined with the fact that in January Apple Chief Operating Officer Tim Cook expressed a greater degree of confidence in the company's ability to see the future than he did in October. However, it might not be enough to satisfy a loud cabal of bloggers and day traders accustomed to watching Apple soar past estimates.

A breakdown of Apple's performance, sorted by product:

Mac
Apple is expected to have sold around 2.2 million Macs during the quarter, according to Piper Jaffray, which would be a slight decline compared to last year. It seems the March iMac refresh came too late in the quarter to offset poor Mac sales in January and February, and that combined with the weakness of the U.S. economy ensured that Apple lost market share in its best market for the first time in quite awhile.

Still, the numbers quoted by Piper Jaffray and IDC do not take into account online sales (Piper) or international sales (IDC). The Mac grew faster outside the U.S. during Apple's first fiscal quarter than it did inside the U.S., so it's possible that trend continued this quarter. And the market has also been flooded with low-cost Netbooks, a category Apple has declined to enter thus far.

iPod
The first quarter of the calendar year is usually a downer for the iPod group, coming off the holiday shopping season. Apple did launch a new iPod Shuffle model, and the overall iPod numbers (including average selling price) could provide some hint of whether consumers had any interest in the redesigned iPod Shuffle.

At March's iPhone OS 3.0 event, Apple broke out iPod Touch sales for what appeared to be the first time, revealing that 13 million iPod Touches have been sold since that device was first introduced in September 2007. Apple has spent a ton of time and money evangelizing the iPod Touch as a gaming and entertainment platform, and investors will be watching for more signs that the company's attempts to move iPod users onto more profitable devices is working.

iPhone
The iPhone is an important barometer of Apple's profitability. Most of the talk around the iPhone over the past three months has centered on future models, with anticipation that Apple will launch a new piece of hardware alongside the debut of the iPhone 3.0 software later this summer. That's because other than the continued growth of the App Store, there wasn't really an event this past quarter that might have given iPhone sales a kick.

Piper Jaffray expects anywhere from 3.7 million to 4.4 million iPhones to have made their way to customers during the past quarter. That's down from the holiday season quarter, but that's not entirely unexpected as the iPhone settles into seasonal patterns.

The rest
Expect analysts to pepper Tim Cook and Chief Financial Officer Peter Oppenheimer with questions about the state of the economy, Apple's pricing strategy in the computer market, and Steve Jobs' return to day-to-day leadership of the company.

If all went well for Apple during the past quarter, it might also be time for analysts and investors to start wondering what Apple is going to do with all that cash: $25 billion at the end of its 2008 fiscal year. While Apple can point to the poor economy as reason for its thrift, if the company continues to perform well investors are going to expect Apple to invest that cash in something: be it another company, another product line, or investors themselves.