After the Bell: Microsoft Earnings on Tap

Software giant  Microsoft (MSFT) reports third-quarter earnings after the market closes Thursday. A consensus of Wall Street analyst estimates projects the company to post earnings of $0.56 per share, compared with $0.77 in the previous quarter and $0.45 in the same quarter last year.

Sales of the dominant Windows operating system for personal computers will be top of mind. Also, analysts will track whether sales of the Windows Phone OS have picked up--the OS has a meager share in a market dominated by  Apple's (AAPL) iOS,  Google's (GOOG) open-source Android, and  Research-in-Motion's (RIMM) Blackberry OS--especially after mobile phone giant  Nokia (NOK) recently announced it would switch to Windows OS for its smartphones.

Investors will also key in on whether sales of Microsoft's cloud-based products revved up, and if that had an impact on margins. Cloud products are typically less profitable for Microsoft compared to its regular software like Windows operating system and Office suite.

At their current price of $26-$27, the shares are down about 8% over the trailing three months, and look moderately undervalued compared with analyst Sunit Gogia's $32 fair value estimate.