On Tuesday, the Street will be tuning into the earnings report from the world's most valuable publicly traded company: Apple (NASDAQ:AAPL). The company will be sharing its third-quarter results after market close, and host a live conference call at 5 p.m. ET. Here are the general expectations going into the report, and why Apple may be reporting some big numbers.

Apple Store China

The expectations
While revenue and earnings per share will certainly be closely scrutinized when the tech giant reports earnings on Tuesday, the big number the market will likely look to first is iPhone sales. At about 57% of Apple's revenue, the phone can ultimately make or break a quarter for the company.

The consensus analyst estimate for Apple's iPhone sales is 35 million units. This is well above Apple's 31.2 million iPhones sold in the year-ago quarter, showing the market's confidence in Apple's continued success at the high end. The year-over-year growth and record third-quarter iPhone sales would go against Samsung's recent pre-earnings report that warned a decline in year-over-year smartphone sales for the same period. 


Analysts expect the company to report revenue of $37.9 billion, up 7.4% from the year-ago quarter. The consensus for EPS is more optimistic as Apple continues to leverage earnings growth by using cash to repurchase shares. Analysts expect EPS of $1.28, up 16% from the year-ago quarter.

Potential drivers for a big quarter
Apple shouldn't have any trouble meeting expectations. Two factors in particular should serve as major drivers for year-over-year growth.

1. New carriers. Since the year-ago quarter, Apple has added a number of new carriers. Two of these carriers, China Mobile and Japan's NTT DoCoMo are the largest mobile phone carriers in their home country.

2. Discounted older models. Apple has said on multiple occasions that the older iPhone 4s has been a hot seller in emerging markets thanks to a much lower price point than Apple's flagship phone. Indeed, in recently released data from ABI Research, Apple said that the iPhone 4s was the world's fifth best-selling high-end phone in the first quarter of 2014. There's no reason this pattern shouldn't continue into the second calendar quarter of 2014, or Apple's third fiscal quarter.

A recent estimate from Needham & Co. analyst Charlie Wolf supports this notion. In Apple's second quarter, Wolf estimates Apple sold 10 million 4s devices. This would account for a meaningful 23% of Apple's total iPhone sales during the quarter.


Image source: Apple.

With solid reasons for iPhone sales to be robust, Apple will likely serve up numbers that remind investors why Apple is a great long-term investment: it consistently dominates the high-end market.

The biggest risk to revenue and earnings could come from weak iPad sales. In Apple's most recent quarter, iPad unit sales were down 16% from the year-ago quarter. With the global tablet market facing challenges, Apple could disappoint in this area. And at about 17% of Apple's revenue, a bad quarter for Apple's iPad segment could have a meaningful impact on revenue and EPS.

Whether Apple beats estimates, or not, one quarters results is usually not enough to make or break an investment thesis for long-term investors -- especially one for a market leader like Apple. Apple shareholders, therefore, should simply use the report as an opportunity to check in and make sure the company is at least meeting or exceeding their expectations. But given Apple's conservative valuation, chances are there won't be any reason to ditch this long-term investment opportunity.

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Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple and China Mobile and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.