NEW YORK ( TheStreet) -- Apple's ( AAPL) first-quarter earnings report failed to live up to Wall Street's expectations, with lower gross margins and a change in guidance. This doesn't mean it's no longer a great company. Right now, it's just not a great stock. Apple generated revenue of $54.5 billion in its fiscal first quarter, earning $13.81 per share. Analysts polled by Thomson Reuters were looking for $54.73 billion in revenue, and earnings of $13.47 per share. Gross margin dipped significantly year-over-year, coming in at 38.6%, compared to 44.7% a year ago. Much of the gross margin concerns can be attributed to iPad mini sales, which have a significantly lower price point and margin than the full-sized iPad. Citi analyst Glenn Yeung noted that the iPad mini's also "hampering corporate growth in the process." In its forward guidance, Apple said gross margin would be between 37.5% and 38.5% for the March quarter. Right now, there's little Apple can do or say outside of a new product that will assuage investors' fears over slowing growth, despite the record results. On the conference call, Piper Jaffray analyst Gene Munster asked about Apple's plans for the living room. CEO Tim Cook avoided talking about new products, but did hint at what's in the pipeline when talking about the Apple TV set top box. "I have said in the past this is an area of intense interest for us, and it remains that, and I tend to believe that there is a lot we can contribute in this space and so we continue to pull the string and see where it leads us," he said. While many expect Apple to eventually release a television set or something similar, investors don't care right now. The focus is on the iPhone, the iPad, and the fact that growth appears to be weakening in the handset market, Yeung noted in his research report. "And while we have little doubt that Apple will introduce new product to regain share (low-end iPhone), their disproportionate share of global handset profit seems at risk," Yeung wrote. He rates Apple "neutral," lowering his price target to $500 from $575. Doubleline Capital's Jeff Gundlach, who in the past has said Apple would go back to $425, believes Apple has a lot of work to do. "'I think this is really a broken company that is over-owned," Gundlach told CNBC's Fast Money. Goldman Sachs analyst Bill Shope, in a note, said that the results were "a tough setback, but the story is not broken." Shope cut Apple's price target to $660 from $760, but reiterated his Conviction List Buy rating going forward.