If Analysts Are Scared of Apple, Why Raise Estimates?

NEW YORK (TheStreet) -- With Apple's(AAPL) earnings on deck today, realize that the media is not being purposefully deceptive. Only careless.

Nearly all are remarking on the fact that Wall Street is nervous. And they are right, to a degree. The stock has been coming off, slipping about 75 points from its high of 644 earlier this month. As the media has done well to point out, widespread concerns about iPhone, iPad and Mac sales are afoot.

But something else is going on, which few are mentioning.

Wall Street earnings estimates for Apple's second quarter (which is due to be reported after the close) have been creeping up, big time. In the past month, nearly 20 analysts have raised their estimates, with the average stretching from $9.75 to $10.06. Even within the past week, at least six analysts have increased their numbers.

This is central to understanding potential market reaction to Apple's earnings. It is normally more meaningful to beat longstanding expectations. Moreover, traders tend to punish companies that miss recently increased earnings.