Carnival Corporation reported a solid second quarter earlier today, with income coming in at $193 million, compared to $73 million last year. The positive earnings were driven by a slight increase in onboard spend and tour revenue, and underscored by a significant reduction in operating costs (led by fuel) and expenses across the board.

On Monday Deutsche Bank upgraded the company to a “Buy” rating based on cost control and what the bank said was a strengthening pricing environment. The bank also raised its price target to $55.30 from $55.00.

On the Q2 earnings call, Arnold Donald, president and CEO, said all North American brands had a strong performance, led by Carnival Cruise Line, with a double-digital improvement in ticket revenue yield.

Donald noted a strong overall public relations effort to drive demand, creating conversation around cruising.

Capacity growth is being managed in source markets by re-deploying some capacity to emerging markets, Donald said, noting additional tonnage going to China in 2016 which will amount to four million passenger cruise days. 

“Over time we are confident China will become one of the largest source markets for cruise,” said Donald. The Chinese outbound travel market is expected to double by 2020, he also added. 

Capacity growth will be restrained and the company continues to look to move older ships with higher operating costs out of the fleet.

Passenger ticket revenues were slightly down overall for the quarter, however, compared to 2014, while onboard spending and tour income grew. The big change came on the expense side, where Carnival was able to reduce spend across of number of areas, including payroll, fuel, and food, as well as tour operations. Fuel expenses were down just roughly 37 percent compared to 2014’s second quarter. 

“We remain focused on our initiatives to control cost by leveraging our scale,” Donald said. That doesn’t mean the company won’t spend, though, as a marketing push will come later this year to drive 2016 bookings, according to Donald.

David Bernstein, CFO, said bookings for the next three quarters are well ahead of last year, but at slightly lower pricing, impacted by currency.