Analysis: Down earnings but Microsoft has reason for optimism

NEW YORK — Fresh off last Wednesday's mostly well-received Windows 10 press event at its Redmond, Wash.., headquarters, Microsoft today unveiled second quarter 2015 results that were down but in line with Wall Street's expectations.

Microsoft shares fell about 3% in after-hours trading, reflecting ongoing challenges for the world's leading software juggernaut. The company has bold ambitions in cloud computing, all the while readying a mammoth transition to the next big version of Windows.

In mobile, which has been an ongoing trouble spot, Windows Phone revenues plummeted 61% though Microsoft largely attributes the decline to the end of a commercial agreement with Nokia. Microsoft did manage to sell 10.5 million Lumia phones during the quarter. And revenues for its Surface tablets climbed 24% to $1.1 billion.

Indeed, there's reason for optimism. The overall mood at Microsoft under CEO Satya Nadella has been way more positive than it was in the last days of the previous regime, a feeling echoed during last week's Windows 10 event. Commented often was some sort of flattering variant on how this is a "new Microsoft."

The new Microsoft seems to be taking a smart approach with Windows 10, an operating system I expect to be commercially available in the fall. The company is saying all the right things about how Windows 10 is meant to work more seamlessly across PCs, tablets, and phones, and though we've heard similar things before, this time I think they have a decent chance of executing that vision.

Microsoft has learned a thing or two about the reasons why Windows 8 never took off in a major way. It also can't hurt that Windows 10, at least at the outset, will be a free upgrade.

I also like how the Cortana voice assistant is poised to take on a bigger role. And gamers should appreciate how Microsoft plans to let you stream titles from Xbox consoles to other Windows 10 devices.

Not to be underestimated is the fact that Microsoft last week showed off holographic technology that is the kind of gee-whiz cutting edge stuff that even people who don't pay close attention to tech ought to take notice of.

We don't know exactly when the holograms will be commercially viable or what eventual products will cost. Holograms could provide a halo. Time will tell if customers and investors notice.

Email: ebaig@usatoday.com; Follow @edbaig on Twitter