Carnival Cruise Lines has reported record revenues of $1.391 billion for its fiscal year ended November 30, 1990, reflecting a 21 percent increase from $1.148 billion for fiscal 1989. Net income was also a record, $206.2 million versus $193.6 million for the 1989 fiscal year.

Net income for the fourth quarter ended November 30, 1990, was $19.2 million on revenues of $296.5 million compared to net income of $21.3 million on revenues of $231.1 million for the fourth quarter the previous year.

According to a statement from Carnival, the decline in fourth quarter net income was directly attributable to the performance of the Crystal Palace and not a reflection of a softening of the company's cruise business.

The company's 15 ships carried 953,221 passengers and achieved a fleetwide occupancy level of 106.6 percent for its fiscal year 1990, compared to 783,486 passengers carried during the previous year. The company carried 234,849 passengers in the fourth quarter compared to 177,296 in the same quarter a year ago.

While Carnival reported record revenues and net income for its fiscal year 1990, the net income margin was 14.8 percent, which although impressive by most industry comparisons, is still down by Carnival standards, from 16.9 percent in 1989 and 32.8 percent in 1988.

Last year, Carnival attributed the decline in net income to increased interest expense and reduced interest income associated wtth the use of funds for the acquisition of Holland America Line, and higher costs incurred in connection with the start-up of the Crystal Palace resort and casino.

The fourth quarter net income of $192 million on revenues of $296.5 million, reflects a net margin of less than seven percent. Last year's fourth quarter's net income was $21.3 million on revenues of $231.1 million, reflecting a net margin of about nine percent. The result was then said to have been impacted by the seasonality of HAL and its affiliated companies and added expense incurred in connection with the opening of the final phase of the Crystal Palace.

If Carnival had been able to maintain the growth increase over 1989 sustained in the first three quarters of its fiscal year 1990, the fourth quarter should have generated revenues of more than $280 million and net income in excess of $30 million. The fact that this did not happen would indicate that the Crystal Palace is a serious drain on Carnival, not only reducing revenues, but also taking a big bite out of net earnings.

Total revenues of $1.391 billion for fiscal 1990 was close to that projected by analysts earlier in the year; net income was somewhat less than projected, however.

Large Fluctuations

Through 1990, Carnival's revenues and net income fluctuated wildly reflecting the seasonality of its cruise and tour business and the decline in tourism business to the Bahamas. Net income went from $25.2 million on revenues of $259.4 million in the first quarter to net income of $54.6 million on revenues of $352.5 million in the second quarter, to net income of $107.2 million on revenues of $482.9 million in the third quarter, down to the fourth quarter's net income of $19.2 million on revenues of $296.5 million.

In fiscal 1989, the third quarter was also the best for Carnival, when HAL and Westours operate at full capacity during the Alaska season.

Cruise passengers carried ranged from 165,031 in the first quarter to 257,443 in the second quarter, when the Fantasy was introduced and the Westerdam and Carnivale re-entered service; to 295,898 in the third quarter, down to 234,849 in the fourth quarter.

As late as in October, Carnival Chairman and CEO Mickey Arison said that he expected a strong fall performance for Carnival and record performance for the cruise industry as a whole.

For Carnival to continue its record-breaking trends, it must reduce the seasonality of its overall business and/or generate more profitable business for the Crystal Palace. Under the present economic conditions, the latter seems a long-shot, however. At press time, Carnival shares traded for around $12.40 on the American Stock Exchange down from a 12-month high of nearly $25.