The earning season is underway at full speed. Overall the Street is expecting a slow quarter due to general macroeconomic weakness and especially the fiscal cliff uncertainty. The results of Apple Inc. (NASDAQ:AAPL) and Western Digital Corp. (NASDAQ:WDC) can have an impact on the entire market; Apple due to its large market capitalization, and Western Digital because it will give a sneak peek into any possible revival of PC sales. Positives from the PC industry can reflect on the valuations of Microsoft Corporation (NASDAQ:MSFT) because it would indirectly mean positive sales data for Windows 8.

Apple Inc. (NASDAQ:AAPL)

Apple Inc. (NASDAQ:AAPL) will report its 1Q13 earnings after the market closes on Thursday. This might be its most important earnings announcement in more than a decade. The Street is expecting it to report EPS of $13.9, and the figure varies wildly between $15.5 and $11.97. This huge variation shows how divided the investment community is on the future of the iPhone and the iPad. The consensus revenue estimate is $54.69 billion and varies between $52.01 and $59.55 billion. The company has given guidance of $52 billion in quarterly revenues and EPS of $11.75, way below the consensus estimates.

The investment community will be closely monitoring the margins, iPhone sales, and outlook for the next quarter.  The market will need answers to these and other important questions from the management call in order to restore investor trust. Some of the key questions on investors’ minds are:

• How much has the iPad mini cannibalized the iPad? What are the margins on the smaller product?
• Is Apple Inc. (NASDAQ:AAPL) looking to increase its dividend payout ratio?
• What were the sales and margins of the iPhone 5? Is the company looking to accelerate the refresh cycle? Is it going to target the low end markets with a cheaper smartphone product?
• What has been the progress on fixing the troublesome maps applications?

Satisfactory answers to these questions, combined with solid iPhone sales data, can improve AApple Inc. (NASDAQ:AAPL)’s valuations. The company has missed analyst expectations in the last couple of quarters, and considering expectations are pretty low this time around, Apple Inc. (NASDAQ:AAPL) needs to do well in order to remain an investor darling.

Western Digital

The last couple of years had been mixed ones for Western Digital. It plunged into a major crisis due to the flooding of its key production facilities located in Thailand. It has recovered superbly from the blow and posted stellar quarterly results for its 4^th fiscal quarter and FY 2012. The company will announce its 2Q FY13 earnings at 6PM EST on Jan. 23. The market is expecting the storage giant to post an EPS of $1.82 and revenues of $3.68 billion. The company has beaten earnings estimates in the last four quarters.

Source: Yahoo! Finance