After a fantastic set of numbers and guidance from Caterpillar (CAT -0.55%) last week, it's time for Manitowoc (MTW 0.39%) to treat its shareholders to some delectable news when it releases its first-quarter earnings this Thursday.

Manitowoc shares have hugely outperformed Caterpillar so far this year, gaining 33% against Caterpillar's 15% gains. With the industry leader getting more and more optimistic about the construction markets, Manitowoc investors have every reason to remain excited, especially since chances that the company will deliver a surprise this week appear high.

Watch Manitowoc's orders and backlog
Sales from Caterpillar's construction business surged 20% year over year during its first quarter. More notably, demand from North America and the Europe, Middle East, and Africa regions continued to rise -- Caterpillar's sales climbed 36% and 20% from the two markets, respectively. That's an excellent signal for Manitowoc, given that the two geographies account for nearly 80% of its crane business sales.

Greater construction activity is pushing Manitowoc to new heights. Source: company website.

In fact, Manitowoc had already hinted at a strong first quarter when it reported having received strong response to its newly launched products at the ConExpo 2014 held in Las Vegas last month. The exhibition is considered an excellent platform for construction-equipment companies to showcase products and build a customer base. Orders reportedly exceeded Manitowoc's expectations, which should reflect in its order and backlog numbers in the company's upcoming earnings report.

Remember that Manitowoc's order value in the fourth quarter already hit levels not seen since the recession, and there'd be nothing better than if the trend continues into its first quarter.

Why Manitowoc could prove the Street wrong
Given the backdrop, you may be surprised to know that analysts see Manitowoc's Q1 revenue improve just about 2% over last year. Perhaps they foresee some weakness in the company's foodservice equipment division, which makes up nearly 38% of its total revenue. That makes sense if you factor in how extreme winters hurt customer count at restaurants. As evidence, McDonald's, one of Manitowoc's key customers, reported 1.7% drop in its fourth-quarter comparable-store sales from the United States.

But given that equipments are long-term purchase decisions for restaurant chains, Manitowoc's business shouldn't be affected much by one weak quarter from the restaurant industry. McDonald's still has plans to open more than 1,500 restaurants this year, which bodes well for Manitowoc.

In other words, I believe Manitowoc could easily silence critics this week, and beat Street estimates on its top line. Caterpillar's stronger-than-expected numbers, and higher guidance for its construction business, have anyway raised the bar for Manitowoc.

Watch its margins
On a brighter note, the Street expects Manitowoc's Q1 earnings per share to more than double year over year despite the small growth in revenue. That could only mean one thing -- Manitowoc's cost-reduction initiatives are paying off.

Manitowoc's fryers are selling well. Source: company website.

I'd urge investors to pay close attention to Manitowoc's margins in its upcoming earnings call. The company proved its mettle during the fourth quarter when it ended with flattish crane operating margin at 7.8% despite 8% lower revenue year over year. Better yet, margin from its foodservice equipment climbed to 17.2% from 13.7% a year ago. Growing margins should push Manitowoc's profits higher even if sales were to take a hit on weakness in some end markets.

Why Manitowoc may not boost guidance
With Caterpillar now expecting 10% higher sales from its construction-equipment business for 2014 versus its earlier 5% projection, I'm expecting Manitowoc to guide well into 2014.

While Manitowoc didn't give out numbers, it last projected "modest top line growth" for its crane business, and "mid single-digit percentage growth" for its foodservice equipment division. With such vague projections, Manitowoc might not improve its outlook this week even if it pulls off a great quarter. That may not go down well with the market, especially after Caterpillar's improved outlook. But you know better than to read much into those forecasts.

Foolish takeaway
For several quarters, Manitowoc's foodservice-equipment business was acting a dampener on its top and bottom lines. The fourth quarter showed visible signs of a turnaround, and it's critical for the trend to continue to help the company really grow. So that will perhaps be the most important factor to watch in Manitowoc's upcoming earnings report. Check back at Fool.com for more analysis and updates about the company.