NEW YORK (TheStreet) -- It's not the mother of all earnings reports, but for Apple , it's pretty close.
Much has been made about Apple, its recent share-price underperformance and "lack of innovation." There have even been a few calls asking for CEO Tim Cook's head.
Sterne Agee analyst Shaw Wu cut his estimates for the March quarter, but noted that expectations for the June quarter have come down "to reflect an inventory drawdown and pause ahead of 2H refreshes. The good news is that data points appear to be hitting a bottom." Wu still rates Apple buy but lowered his price target to $610.
He believes Apple is likely to miss fiscal second-quarter numbers when the Cupertino, Calif.-based technology giant reports earnings tomorrow after the close of trading. Wu is expecting Apple to earn $10 a share on $41.3 billion. Analysts polled by Thomson Reuters are expecting an average of $10.04 per share in profit on $42.38 billion in revenue. When Apple reported its fiscal first-quarter earnings, it gave revenue guidance between $41 billion and $43 billion.
The key to this report will be guidance for the June quarter, as Apple gets ready to refresh its product lineup, with the oft-rumored iPhone 5S and new iPad and iPad mini tablets. Wu cut his iPhone estimate for the June quarter to 28 million iPhones, down from 30 million units, but left his iPad and Mac numbers unchanged, at 19.8 million and 4 million units, respectively.
Macs may wind up being a bright spot, due to better availability. "For Macs, our checks indicate better than seasonal demand helped by better availability and yields on the new iMac," Wu wrote.
June guidance may not be everything it's cracked up to be, given recent rumors in the marketplace about a delayed iPhone 5S. Citi analyst Glen Yeung, who rates shares neutral with a $480 price target, believes the iPhone 5S could be delayed as much as two months, as Apple ramps up production. "However, any such delay raises risk to consensus expectations for 12% sequential revenue growth in 4Q13(Sep), noting that 4Q12(Sep) and 4Q11(Sep) grew at only 3% q/q and -1% q/q respectively," Yeung wrote in his report.
Yeung is expecting Apple to refresh much of its product lineup in its fiscal fourth quarter, as it did last year. He's expecting the iPhone 5S, a new iPad mini with Retina Display and one without Retina Display; a lighter, thinner iPad 4; and a MacBook Air with Retina Display. He did note that he does not expect a larger-screen iPhone and has not baked in a low-end iPhone to his estimates, as he remains unclear on the topic.
BGC Partners analyst Colin Gillis noted that any positive news about the next product cycle could be a catalyst for the stock to move toward $500. "We are not saying that the challenges facing Apple as the tablet and smartphone markets evolve are going away (declining ASPs, saturation of developed economies, lackluster innovation), but it is possible that the pessimism surrounding the stock could lift as we approach the next product refresh cycle," Gillis wrote in a research report. He upgraded Apple shares to buy from hold but lowered his price target to $500 from $550.
Apple shares were higher in Monday trading, up 1.62% to $396.86.
--Written by Chris Ciaccia in New York
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