As management stated right at the beginning of the earning release, operating income, net income, and earnings per share (without adjustments) saw declines of 3%, 32%, and 30%, respectively. Oh, and there's another decline that's really distressing. The top line fell by 6%. This is huge news, since it is the first revenue decline in many, many years. So, at least the bottom line delivered.

Shares traded higher in the after-hours session. Microsoft would have made a nice earnings trade for the quick participant.

However, I'm not sure why investors were buying, especially since this after-hours gain was on top of a rise made in the regular session. Shorts covering their bets? Who knows. As I look through the release, I see, in a relative sense, a struggling company. Don't get me wrong, Microsoft isn't in a death state or anything like that. But cash from operations is down, the recession is exerting pressure, and segments devoted to entertainment/devices and online services are showing losses. I just don't see why Microsoft was being rewarded after the report.

But being rewarded it is, and you don't argue with the market. It is what it is. Of course, that doesn't mean you have to necessarily buy, either. As I mentioned in my earnings preview, I recently did a trade with Microsoft. I may see what happens in the regular session on Friday and determine if it is time to get into the company yet again. Like I've been saying, maybe the stock markets are becoming more and more confident that the recession is coming to a close this year and are buying ahead of that, even on weak earnings reports. That might explain why some investors are taking a chance on the company.

Disclosure: I don't own any company mentioned; positions can change without notice.