Apple Conference Call Takeaway: Shares Slip After Analysts Pepper Management About Growth, Margins

Apple sold a Q2 record 37.1 million iPhones and it was the number one phone sold in Japan in calendar year 2012. This marked the first time that a non-Asian phone brand has claimed this mark. However, analysts nagged management about gross margins, particularly with the iPhone, the highest revenue generating product for Apple. the ASP (Average Selling Price) for the iPhone slipped $28, which continued to weigh on gross margins, although management would not go into individual product margins. Apple also sold 4 million Mac computers, which was down 2% from the second quarter last year. The biggest announcement came with Apple's cash. Apple ended the quarter with $144.7 billion in cash and short-term equivalents. Investors have been begging for Apple to return some of that to shareholders and the company has finally responded. Apple doubled their cash return program to $100 billion dollars, with a $50 billion increase to the share buyback program, which will run through 2015. The dividend was also boosted 15%, to $3.05. The company also brought in a record profit for iTunes and a second quarter record for iPad sales. Management also hinted at potential new products in the fall of 2013 and throughout calendar year 2014, but did not provide any details besides from "being excited" for them. Apple had impressive uses for its cash, but growth has again got in the way of shareholder optimism. Apple guided for $33.5 billion - $35.5 billion in revenues, significantly below analyst expectations of $38.5 billion. Gross margins were also lower, with Apple expecting 36% - 37%, with analysts looking for approximately 38.7%. The stock initially popped on the results and news when the stock resumed trading around 4:50 pm, but have since given up most of the gains on growth concerns and continued gross margins pressure. AAPL currently -0.16 Percent to $405.50.