Apple will report earning results on Wednesday, January 23rd and a renowned research firm known as Mizuho Securities expect in-line performance for EPS while analysts believe that there is a slight downside risk to revenues.

Mizuho believe Apple Inc. (NASDAQ:AAPL) should deliver upside to iPhone forecasts while iPad shipments and ASPs will likely be below expectations. For F2Q13, there is material downside to forecasts as expectations for iPhones and iPads need to move lower.  The research firm continue to like the stock as valuation remains attractive despite challenges but they would wait for earnings result before adding more to the position.

AAPL earnings

Expecting in-line F1Q13 results on January 23 after the close.

Mizuho expect Apple Inc. (NASDAQ:AAPL) to report revenues and EPS around $53-54B and $13.00-13.50 vs. consensus of $54.8B and $13.44 and guidance of $52B and $11.75. For gross margin, the research firm believe Apple will end up in-line with consensus of 38.5-39.0%, which is 2-3 percentage points above guidance of 36%.

While there is upside to iPhone forecasts, iPad shipments could be lighter.

Analyst of the firm expect Apple Inc. (NASDAQ:AAPL) to report iPhone shipments of ~50M, which is ~3M above current consensus. iPhone shipments gained from price reductions of the iPhone 4S and 4 as well as expanded distribution and alleviation of supply constraints for the iPhone 5. For iPads, revenues could fall short due to fewer shipments and lower ASPs. The segment will experience a greater mix of iPad 2 and iPad mini but supply constraints impacted iPad minis.

F2Q13 estimates to move meaningfully lower.

Mizuho believe current F2Q13 consensus of $47B in revenues and $12.18 in EPS are high and they are likely to move lower by $4-5B and $1.00-1.50, respectively. In their view, forecasts for nearly all segments need to move lower. The company should experience a meaningful sequential drop in iPhone shipments due to normal seasonal down-tick as well as fulfillment of pent-up demand associated with the new product release in the December quarter. For iPads, while there is slight downside risk to the unit volume forecast, the segment’s ASPs should also move lower. The research firm expect the company to guide quarterly revenues and EPS around $39B and $9, respectively. For gross margin, management is likely to call for a modest sequential improvement.

Research firm reiterates Buy rating and $600 PT.

While Apple Inc. (NASDAQ:AAPL) is facing more challenges now in terms of a slowdown at the high end of its markets and mixshift moving toward lower end solutions, the research firm believe the current valuation of 10x earnings or 8x earnings ex-cash balance is attractive for a company offering a 2% dividend yield, strong customer following, market leadership in the emerging mobility space and double digit earnings growth. Having said that, the firm would wait for the earning results before adding more to positions.

On Friday, Apple Inc. (NASDAQ:AAPL) stock closed at $520.30, down 0.61%.