Microsoft, which today confirmed the completion of its acquisition of Nokia’s Devices & Services business, announced relatively stable financial results for its fiscal third quarter which it claimed were driven by the company’s momentum in the cloud market.

The software giant reported revenue of $20.4 billion for the quarter ending 31 March, down slightly from the equivalent quarter in 2013. It reported net income of $5.66 billion, down from $6.06 billion in the same period last year.

Microsoft’s cloud-based Office 365 productivity software saw a 100 per cent increase in revenue, showing strong enterprise momentum. Revenue from its Azure platform grew 150 per cent.

New Microsoft CEO Satya Nadella (pictured) said the results demonstrate not only the strength of the business, but also “the opportunities we see in a mobile-first, cloud-first world”.

Reaction to Nadella’s claims was mixed. “For all Microsoft’s talk about mobile and cloud, those two categories likely generate under 10 per cent of Microsoft’s revenue today,” noted Jackdaw Research’s Jan Dawson in a blog.

Microsoft’s Devices and Consumer division revenue grew 12 per cent to $8.3 billion, with revenue from its Surface tablet range increasing by more than 50 per cent to reach around $500 million.

Using data from Microsoft’s 10-Q filing with the US Securities and Exchange Commission, Jackdaw Research estimated that the company generates just under $400 million in revenue related to Windows Phone and Android licensing each quarter.

Microsoft recently announced it would stop charging licensing fees to OEMs to use Windows Phone on devices of less than 9 inches in size. Going on the above figures, Jackdaw Research claims Microsoft would lose out on $100-$200 million in revenue per quarter through this strategy. And with Nokia contributing the vast majority of Windows Phone revenue anyway (around 90 percent), this loss of revenue will be transferred internally.

On the subject of the Nokia deal, Nadella claimed that “with the addition of Nokia’s talented people, and their deep expertise in mobile technologies, we will enhance our device capabilities”.

“For Q4, we will clearly show the impact of the ending of the commercial agreement, Nokia’s ongoing operations, and any one-time integration and severance costs,” added Amy Hood, the company’s CFO.

Jackdaw’s Dawson remains sceptical. “To the extent that Microsoft is to be a mobile-first, cloud-first company, its revenues are still very much rooted in the PC and in traditional software models,” he wrote. “Windows and old-style Office revenue likely accounted for over 50 per cent of revenues and over 90 per cent of operating profits in the most recent quarter. Mobile meanwhile, accounted for about $300 million, while those Enterprise Cloud Services were just $700 million, and Office 365 likely accounted for well under a billion dollars as well.”

He claimed Microsoft has “a heck of a long way to go” and faces “huge executional risk along the way.”