PREVIEW-Apple results still seen sweet despite recession

By Scott Hillis

SAN FRANCISCO, April 22 (Reuters) - Anyone looking for evidence that the U.S. economy is headed for recession probably isn't going to find it in Apple Inc's (AAPL.O: Quote, Profile, Research) quarterly results this week.

Apple is thought to be shrugging off the miasma that is smothering the financial and housing industries, thanks to robust sales of its Macintosh computers and renewed enthusiasm over the iPhone.

Shares of the iPod maker, which touched $200 in late December only to fall a dizzying 40 percent over the following two months, have clawed back 20 percent since late March.

"While vulnerable to consumer slowdown, Apple's momentum may be recession-resistant," RBC Capital Markets analyst Mike Abramsky wrote in a recent note. "Although economic slowdown remains a risk, Apple's fundamentals remain healthy, and earnings power and cash flow remains strong."

Wall Street analysts are fond of saying the Apple story always boils down to Mac shipments, which are expected to have been between 2.04 million and 2.2 million units in the March quarter, according to estimates from four analysts.

But while Apple's fiscal second quarter results on Wednesday are expected to be strong -- with Reuters Estimates seeing a 25 percent jump in profit excluding special items -- questions remain about how badly the company would suffer if the U.S. economy worsened.

Apple famously gives very conservative financial forecasts that it usually ends up easily beating. Still, some have a sneaking fear that, this time, low-balling executives will turn out to mean what they say.

"While we believe Apple will report a strong quarter relative to guidance ... we are concerned whether it will be good enough and whether investors will be as forgiving with conservative guidance," wrote American Technology Research analyst Shaw Wu.