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Apple Inc. (AAPL - Analyst Report) is expected to beat expectations when it reports first quarter results on Jan 23, 2013 after the closing bell.

Why a Likely Positive Surprise?

Our proven model shows that Apple is likely to beat earnings in the first quarter of 2013 because it has the appropriate combination of Zacks Earnings ESP and Zacks Rank.

Zacks ESP: Expected Surprise Prediction or ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Currently, the Most Accurate Estimate and the Zacks Consensus Estimate for Apple stand at $13.92 and $13.47, respectively. This equates to a +3.34% ESP for Apple.

Zacks Rank #3 (Hold): Note that Zacks #1, #2 and #3 Ranked stocks have a significantly higher chance of beating earnings.

These two factors make us reasonably confident about a positive earnings beat on Jan 23.

What is Driving the Better than Expected Earnings?

We expect strong performance from iPhone 5 combined with the launch of the new iPad mini, iPad 4 and iMac product lines to drive earnings in the first quarter.

Apple launched iPhone 5 in China, South Korea and 50 additional countries in the first quarter. Apple sold 2 million iPhones in China in the very first weekend. In the domestic market, carriers AT&T (T - Analyst Report) and Verizon (VZ - Analyst Report) also reported continued strong demand for iPhone 5.

Apple’s new iPad mini and iPad 4 received overwhelming response, as the company sold three million iPads in just three days of launch. Apple also launched the iTunes store in Russia, Turkey, India, South Africa and 52 additional countries in the first quarter.

Other Stocks to Consider

Apple is not the only firm looking up this earnings season. We also see likely earnings beats coming from these two industry peers: Inc (AMZN - Analyst Report), which has a Zacks Earnings ESP of +20.7% and Zacks Rank #3 (Hold).

Facebook (FB - Analyst Report), which has a Zacks Earnings ESP of +9.1% and Zacks Rank #2 (Buy).

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