Carnival Corporation reported net income of $283 million, or $0.35 per share, on revenues of $2.7 billion for its first quarter ended Feb. 28, 2007, compared to net income of $251 million, or $0.31 per share, on revenues of $2.5 billion for the previous year.

While net income was up and exceeded Wall Street’s consensus of $0.34, operating income was $353 million for the first quarter of this year, compared to $349 million last year, and the balance of net income was made up from lower interest expenses and tax
benefits.

The 9.1 percent increase in revenues was driven by a 7.4 percent increase in capacity, but ticket revenue per passenger was down, as each passenger spent approximately $1,171 in the first quarter of this year, compared to $1,254 for the same period last year. Onboard and other spending was up – $357.71 per passenger this year, compared to $353.91 last year.

Carnival Chairman and CEO Micky Arison said in a prepared statement that the company’s European brands offset the pricing weakness in the Caribbean. He added that booking trends for the Caribbean are picking up and that the volume increase year-over-year is well above the 2007 capacity increase, especially for Carnival Cruise Lines Caribbean programs, although pricing is below last year’s levels.

Outlook

According to Carnival, on a cumulative basis (and capacity adjusted), advance bookings taken for the last nine months of 2007 are slightly ahead of last year. Pricing on a cumulative basis is down slightly compared to last year. The company continues to expect earnings for 2007 in the range of $2.90 to $3.10 per share, compared to $2.77 per share in 2006.

For the second quarter, Carnival is forecasting earnings per share in the range from $0.45 to $0.47, compared to $0.46 in the second quarter of 2006.

Initiatives

Carnival has recently initiated several efforts in order to continue to grow earnings and income. In Spain, Carnival has signed a letter of intent to form a joint venture with Iberojet, which is expected to be completed in 2007.

The joint venture, which will be 75 percent owned by Carnival, will operate Iberojet’s current two ships and will grow the fleet through the transfer of existing tonnage from Carnival Corporation’s current fleet.

Plans to form a joint venture with TUI are also expected to close in 2007. The proposed joint venture will operate two brands, Carnival’s existing AIDA Cruises and a new TUI Cruises brand aimed at a more mature clientele. Carnival has previously said that new ships will be built for Tui, but did not repeat that in its recent earnings release.

In addition, Windstar Cruises is being sold, with the deal expected to close in the second quarter.

Second One-Day Sale

In related news, Carnival Cruise Lines will offer a second one-day sale on March 22, “capitalizing on the momentum created by a record six-week booking period, as well as the company’s highest single-day reservations record,” according to a press release.

Carnival said that bookings were up 28 percent from February 5 through March 18, compared to the same period last year. At the same time, the line’s capacity increased six percent.

The first one-day sale took place on March 1 and generated the highest number of individual reservations in a single day, according to Carnival, while that full week, from Feb. 26 through March 4, marketed the single highest one-week reservation period in the company’s history.

Sample starting prices include $249 for three-day cruises and $499 for seven days.