Carnival Corporation reported net income of $1.02 billion, or $1.73 per share, on revenues of $4.37 billion for its fiscal year ended Nov. 30, 2002, compared to net income of $926.2 million, or $1.58 per share, on revenues of $4.54 billion for the same period in 2001.

Net income for the fourth quarter ended Nov. 30, 2002 was $191.3 million, or $0.33 per share, on revenues of $1.04 billion, compared to net income of $116.3 million, or $0.20 per share, on revenues of $959.1 million for the same quarter in 2001.

Earnings for the fourth quarter of 2002 included a $17 million income tax benefit from Costa Crociere, while earnings for the fourth quarter of 2001 included a $39 million impairment charge.

Carnival carried 3,549,000 passengers in its fiscal year 2002 for a load factor of 105.2 percent, compared to 3,385,000 passengers and a load factor of 104.7 percent in 2001.

Carnival projected a 17.5 percent capacity increase for 2003 mostly at Carnival Cruise Lines and Costa, which are described as "lower yielding" but with "higher profitability."

"We manage profitability, not yield," noted Carnival Chairman and CEO Micky Arison. "The lower yielding ships are more profitable for us," added Vice Chairman and COO Howard Frank.

Revenue was down from the previous year, which Carnival attributed to a significant decline in the number of passengers buying air transportation from the company.

Based on bookings as of December 19, 2002, Carnival expected net revenue yield for the first quarter to be up from one to three percent compared to the previous year. Frank said in a conference call that the "occupancy level was about the same as last year, but that pricing was higher." Bookings continue to be close in.

At the time, Frank also said that bookings were slowing down, which he said could be partially attributed to media coverage of the virus outbreaks.

As the call was arranged just prior to the cruise lines' strongest booking period, the so-called "Wave Period," starting in January, Arison said that the company will know by the second or third week of January how strong the wave is.

Frank added that it was hard to compare bookings year-over-year based on the many variables involved, such as the threat of war, but that he was not too concerned.

Meanwhile, he said that there was pricing improvement across all the cruise brands in the contemporary, premium and luxury sectors. "The pricing environment does not look all that bad compared to last year," he added. On Dec. 19, Carnival said that 90 percent of its Q1 (ending Feb. 28) was sold and that bookings for the rest of the year were at similar levels as last year or slightly ahead.

Carnival expects operating costs to be up four to six percent for the first half of the year because of higher fuel costs and increased marketing costs. Both Carnival Cruise Lines and Holland America Line are launching new ad campaigns in the first quarter of 2003. Carnival also expects to incur substantial advertising costs for the Queen Mary 2 with no revenue until 2004 when the ship starts service. Cunard Line's capacity will jump 95 percent when the new ship enters service, according to a Carnival conference call.

Gary Cahill, senior vice president of finance and CFO, claimed again that onboard revenue has only grown with inflation.

"Basically, it is increased capacity that drives our business," said Frank. Arison noted that all the yards have what he called "significant availability in 2005, 2006 and beyond."

But he added that with the withdrawal of subsidies and the weak dollar, that newbuildings now cost 25 percent more than before.

In related news, Carnival has declared a dividend of 10.5 cents per share for shareholders on record as of Feb. 28, 2003.