Carnival Corporation, the world's largest cruise line, reported last week record net income of $409 million on revenues of $2.52 billion for its second fiscal quarter which ended on May 31, 2005. Net income for the parallel quarter of 2004 was $332 million on revenues of $2.26 billion. The 2005 results reflect an 11.5 percent rise in income and a 23 percent jump in profit over the parallel quarter in 2004.

The increase in earnings was driven by both a 5.3 percent increase in cruise capacity and a significant growth in net revenue yields which more than offset substantially higher fuel costs. Net revenue yields for the second quarter of 2005 increased 8.4 percent compared to the prior year, primarily due to higher cruise ticket prices and, to a lesser extent, higher occupancy and a weak U.S. dollar relative to the euro and sterling.

Carnival beat analysts expectations by 4 cents per share, reporting net profit of 49 cents per share.

Carnival chairman and CEO Micky Arison said he was very pleased with the continuing strong growth in demand for the company's cruise products. "The recognition by consumers of the extraordinary value of our cruise products helped to increase our net revenue yields by over 8 percent in the second quarter - the fifth straight quarter of net revenue yield increases of 7 percent or better," he said. "The strong revenue yield performance enabled us to grow net income more than 23 percent in the second quarter despite historically high fuel costs," Arison said.

Forecasting continuing strong demand for travel, the company has increased its expectation for net revenue yields for the last six months of 2005, on a constant dollar basis, by approximately 1 percent to 4.5-5.5 percent over last year. The company now projects that 2005 profits will rise 21 percent to $2.70 per share, 3 cents higher than the previous company guidance. However, even that amount is slightly lower than analysts' expectation of $2.73 per share.

Carnival currently operates 78 ships. The company has one ship scheduled to enter service during the third quarter of 2005. Carnival Cruise Lines' 2,974-passenger Carnival Liberty will launch the line's first-ever Mediterranean cruise program beginning July 20.

Carnival shares rose 2.53 percent Friday on the New York Stock Exchange to close at $57.88.