Apple’s second-quarter earnings coming up on Tuesday are keenly awaited by market participants to know how far the Q2 results will impact the tech giant’s stock.

This is despite the available guidance that sales might be down compared to the same period last year.

But investors are optimistic that results will not rattle the Apple stock that is 43 percent up, since January, even after a lackluster first quarter.

Revenue slip in Q2 is a foregone conclusion

Apple said on January 2 that its crucial holiday quarter revenue would be $7 billion down from its previous projection following the dip in iPhone sales in China market.

Many Wall Street analysts covering Apple in recent weeks have lowered price targets for the stock. However, many positives on the stock's viability are judged by other factors.

The broad analysts' expectation is that Apple will deliver an average second-quarter EPS of $ 2.37. The revenue will approximate $57.4 billion, likely down by an average 6 percent compared to last year.

The silver lining on revenue is that even if the iPhone unit sales might be down, the growth in service segment revenue might offset that.

Even in Q1, despite15 percent fall in revenue from iPhone sales, services revenue jumped 19 percent when compared to the previous year.

Since Apple has stopped reporting the iPhone unit sale figures the precise data to gauge the decline year-over-year may be hard to see.

But Morgan Stanley’s forecast says iPhone sale in Q2 must be 42 million vs 52 million made during the same quarter last year.

Why the stock is up despite falling sales?

At the same time, minor turbulence in stock is also not ruled out, in the aftermath of the results, lasting a few sessions. Analysts concur that Apple stock has a history of volatile earnings' reactions.

When the last quarter results came out, the Apple stock zoomed 6 percent then took a modest beating.

Analysts at note that Apple’s seven-day movement ahead of earnings has been 4 percent. The stock is already up 29 percent year-to-date. On Friday, Apple shares closed at $204.30.

UBS analyst Timothy Arcuri’s outlook is more positive. He argues that Apple's earnings outlook and guidance are fine, irrespective of headwinds on iPhones.

GettyImages-Apple Logo
The Apple logo is displayed in an Apple store in lower Manhattan on August 2, 2018 in New York City. Photo by Spencer Platt/Getty Images

“We model rev/EPS of $56.5B/$2.33 vs Street $57.6B/$2.36 and $55-59B guide on slightly lower iPhone rev due to lower ASP ($687 vs $745), supported by CIRP data and UBS procurement estimates both suggesting mix shift to older models,” Arcuri wrote.

Apple’s diversification signals

In tune with the soaring stock, Apple has been putting in a brave face brushing aside the anxiety over dipping iPhone sales.

Apple recently canceled a product launch, AirPower, a wireless charging pad. The tech giant also held an invite-only event at Cupertino campus in March affirming its foray into entertainment and streaming business.

In a bid to expedite its readiness for a 5G-friendly smartphone, Apple also patched up with supplier Qualcomm.