Microsoft Reports Record 2nd Quarter Profits

[shams]

dolemit3 said:

 

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EDD operating income increased during the three months ended December 31, 2007, primarily due to the increased revenue, decreased cost of revenue, and decreased sales and marketing expenses. Cost of revenue decreased $523 million or 22% during the three months ended December 31, 2007, primarily driven by decreased Xbox 360 manufacturing costs. Sales and marketing expenses decreased $81 million or 16%, reflecting a decline in Xbox 360 platform marketing expenses. EDD operating income increased during the six months ended December 31, 2007, primarily due to the increased revenue. Headcount-related expenses increased 17% and 14% during the three and six months ended December 31, 2007, respectively, reflecting a 4% increase in headcount and an increase in salaries and benefits for existing headcount, partially offset by decreased stock-based compensation expense.

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That's interesting. That is a huge drop in costs - the 360 must be becoming *much* cheaper to manufacture than it used to be. No wonder the flakey hardware doesn't bother MS that much.

And a drop in marketing expenses of amost 100m - wow, given it was the Xmas qrt!

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The difference in revenue between a year and now is basically zero. However, there is a 600m difference in profits - which is pretty close to the $500m saved from costs + $100m saved from marketing.

Hmmm....

(if they follow the same pattern, rinse & repeat - revenue will stay the same, but profits will continue to rise)