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NEW YORK (TheStreet) -- Apple (AAPL)  was falling in after-market trading Monday on concerns that future gross margins may be contracting despite reporting earnings that otherwise beat Wall Street expectations. Shares were dropping 2.3% to $517.93 in after-hours trading following a 0.65% advance during the regular session in which the stock closed at $529.38.

Cupertino, Calif.-based Apple reported net income of $8.26 per share on $37.5 billion in revenue as iPhone sales topped 33.8 million during the quarter compared to 26.9 million in the same period a year earlier. The company also sold 14.1 million iPads and 4.6 million Macs during the quarter. Gross margin for the quarter was 37%.

Analysts surveyed by Thomson Reuters are looking for Apple to earn $7.96 a share on $36.93 billion in revenue for the fourth quarter.

"We're pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones," said Tim Cook, Apple's CEO. "We're excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS."

"We generated $9.9 billion in cash flow from operations and returned an additional $7.8 billion in cash to shareholders through dividends and share repurchases during the September quarter, bringing cumulative payments under our capital return program to $36 billion," said Peter Oppenheimer, Apple's CFO.

Apple ended the quarter with $146.76 billion in cash and cash equivalents during the quarter, a topic that has come under much scrutiny in recent weeks. Activist Carl Icahn has advocated that Apple increase its already large buyback program, calling for the company to return $150 billion to shareholders in the form of a buyback program.

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For the fiscal first-quarter, Apple expects to generate between $55 and $58 billion in revenue, with gross margins between 36.5% and 37.5%. It expects operating expenses to be between $4.4 and $4.5 billion.

Analysts surveyed by Thomson Reuters are looking for Apple to generate $13.81 a share in earnings on $55.7 billion in revenue for its fiscal first quarter.

Apple will be holding a conference call at 5 p.m. to discuss the results.

--Written by Chris Ciaccia in New York

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