Apple Inc. (NASDAQ:AAPL) typically has a seasonally slow quarter during the first three months of the year, but just how slow this year’s first quarter was is now up for debate. Some analysts, like Katy Huberty, believe the company will surprise to the positive, citing their own data, but Societe Generale analysts say their checks actually suggest weakness in both iPhone and iPad volumes. They’re modeling flat iPhone volumes and a slight decline in iPad volumes.

Apple Inc. (AAPL) Earnings Preview

A bright side to Apple’s quarter

In a report dated April 17, 2014, analysts Andy Perkins and Peter Knox say Asian data and numbers from Apple Inc. (NASDAQ:AAPL)’s handset assemblers was relatively weak. They say it suggests that volumes “corrected more aggressively than usual” during the March quarter after the exceptionally strong holiday quarter. As a result, they are now estimating iPhone volumes which are flat with the March quarter of last year.

On the bright side though, they believe the iPhone 5S is continuing to become the dominant model, which means the average selling price could be higher. They bumped their estimate up from $637 to $645 based on an expected greater mix of the more expensive model.

The Societe Generale team also says that Asian data suggests a weak quarter for iPad sales, so they have reduced their estimates to show a slight decline in volumes year over year.

Apple’s cash return plans to affect earnings

In addition to iPad and iPhone volumes, another key part of Apple Inc. (NASDAQ:AAPL)’s earnings report this time around could be any announcement regarding capital return plans. In a report dated April 16, 2014, Bernstein analysts Toni Sacconaghi, Jonathan Cofsky and Eric Garfunkel say they also more downside than upside risk to Apple’s numbers, although they see a greater risk to the June quarter than the March quarter.

In this next earnings report, they expect Apple Inc. (NASDAQ:AAPL) to reveal a decision regarding incremental cash returns. They think many value investors are looking for a clear framework and stronger capital return commitment, like a minimum percentage of free cash flow which will be returned to shareholders. They believe that returning as much as 70% of Apple’s free cash flow would be sustainable.

However, they think instead that Apple Inc. (NASDAQ:AAPL) will simply add to its current share repurchase program, possibly increasing it by $30 billion through the end of the 2015 calendar year. They believe that Apple may have already repurchased between $45 billion and $50 billion of the original $60 billion which had been authorized by the end of 2015.