Apple Inc. (NASDAQ: AAPL) is reporting its fiscal third quarter financial results Monday, July 21, after the close. The question is not only what Apple will report, but also how the Street will react, and most important, is it a buy ahead of earnings?

In terms of numbers, according to Thompson Financial's survey of analysts, Apple is expected to report net income of $972.6 million, or $1.08 per share, on sales of $7.4 billion. That's an 18.9% profit growth and a 37% sales growth.

Investors will be interested in the following:

iPhone sales numbers for Q3 may not interest investors that much, as the new 3G iPhone was released in fiscal Q4, and that is expected to be the main driver of iPhone sales going forward. The launch, despite its technical glitches was very successful, but investors might be concerned over Apple's ability to supply the demand. Already German and many U.S. stores have experienced shortages.

Then there's the very successful computer segment with Mac sales growing 38% year-over-year in Q2 (Apple's Q3) for the No. 3 spot in the U.S. after Dell (NASDAQ: DELL) and HP (NYSE: HPQ), according to Gartner. Apple Mac sales represented an 8.5% market share. Investors are likely to be happy with results here.

Then there's the iPod. Many investors are worried the iPhone will cut into iPod sales. This will be one area where investors will focus their attention.

And lest we forget margins, gross margins were already a little disappointing last quarter. Now, Apple has cut the price of the iPhone even further. What will that do to margins? [Update: Many people have commented that Apple is getting subsidies (as opposed to the previous revenue-sharing model) and therefore the price cut wouldn't matter to margins. Some analysts, however, believe the subsidies will not be equal over time, and that Apple will be making less from the subsidies. You can see my comment below for more detail.] How has increasing raw material and energy prices affected Apple's costs? And how much of that will be offset by the falling dollar?

Guidance? While the Street is used to Apple guiding well below analyst expectations, there's a limit, of course, to the Street's tolerance, too. And will there be any hints of new product launches?

Then there is the puzzling Apple's share price. For some reason -- as I doubt there are many long-term bears on Apple out there -- the stock hasn't moved much the last few months. In fact, it was even left behind in the recent rally Wall Street experienced.

So, how investors will react Monday? Apple will undoubtedly beat (when hasn't it?) and give its usual below-estimates guidance. But I expect the report to have a few (somewhat disappointing) surprises, especially regarding margins, iPod sales and the amount of the beat. If you recall, BloggingStocks' Andrew Horowitz asked last quarter whether that was the last beat. Who knows, maybe he was right.

Investors could choose to react to specific statements or numbers initially, but I trust most will come to their senses in time. The question is when. Apple stock was down over 2% by midday to $168 today, undoubtedly enticing some to snap up shares at this price. Even though with the iPhone and Mac, as well as continued strong iPod sales, Apple is a long-term buy, I'd be careful to jump in ahead of earnings.