Raymond James: Apple's Quarter Wasn't Perfect

In a report published Tuesday, analysts at Raymond James maintain their Market Perform rating on

. The company has posted its fiscal 2Q15 results with higher than estimated revenue and EPS, offset by weakness in the iPad trends. The revenue and EPS upside during the quarter was driven by robust Mac and iPhone sales. Sales of iPhone units were marginally above the estimates, while ASPs came in higher than the December quarter, despite the stronger Fx headwinds. "Growth in China (+71% y/y), APAC (48% y/y), and other emerging markets (BRICs, 52% y/y) continue to be impressive, which assuages some fears of ASPs being too high," the analysts said. However, the initial gross margins reported for the iWatch have been lower than the overall guidance average, while the company has been "reluctant to provide concrete, long term margin potentials and/or targets on the product line," according to Raymond James. Going forward, the analysts expect a deceleration in iPhone sales, following the peak year on year growth seen in December. Service revenues have also continued to slow down, with decline in iTunes download revenue. Given Apple's investments in the offshore markets, the company is likely to face difficulties because it can only use US cash flows for buybacks and dividends. "If a repatriation holiday becomes unlikely, we would not be surprised to see Apple make some major acquisitions outside the US," the analysts added.