Microsoft Corporation said its revenue dipped 0.4 percent to $20.4 billion in its fiscal third quarter ending March. Net income was $5.66 billion, down 6.5 percent year-on-year. Analysts, however, said Microsoft showed surprising strength in its Windows business.

Sales to computer manufacturers rose four percent on-year, driven largely by sales for corporate and institutional users that rose 19 percent on-year. Chief Financial Officer Amy Hood said remains strong among business firms but Microsoft remains under pressure from competition in tablet devices.

Microsoft also drew strength from its expanding Office 365 business. Revenue for this business doubled from a year ago to a $2.5 billion. "Seats," or the number of computers licensed to use Microsoft software, rose nearly 100 percent.

Office 365 Home subscribers grew by one million users to 4.4 million not including numbers from the launch of the Office for iPad subscription business. Microsoft reported 12 million downloads of Office for iPad in a week.

The Microsoft Azure cloud platform saw revenue double. Its commercial business saw revenue grow seven percent to $12.2 billion. SQL Server, the database program, posted a 15 percent increase in revenue. Double-digit gains were also recorded for the Lync, SharePoint and Exchange products.

Microsoft also sold more than five million Xbox One consoles since launch.

"I sum up this quarter in two words: execution and transition," said CEO Satya Nadella. "We delivered solid financial results and we took several steps to reorient Microsoft." He said the results reflect Microsoft's strengths and opportunities in a mobile-first, cloud-first world.

He noted that keeping the staff and products focused on that idea is one of his priorities.

Unearned income was up 19.5 percent to $14.5 billion. Revenue contracted but not billed exceeds $22 billion.