Ahead of the Bell: Navistar International upgraded

A JPMorgan analyst on Friday raised her rating for Navistar International Inc., after the heavy truck maker reported strong third-quarter results and raised its fiscal-year guidance.

Ann Duignan raised her rating for Navistar to "Overweight" from "Neutral," saying that the company's manufacturing segment reported a profit of $413 million, well ahead of her prediction of $291 million.

In addition, the company reported a truck margin of 12.2 percent, while Duignan expected a margin of 7 percent.

"Importantly, we believe that the improvement in truck margins has been driven by both military business (on flat volumes in fiscal third quarter) and 'traditional' North American truck volumes, largely on the back of ProStar's market share gains," Duignan wrote in a note to investors.

As a result, Duignan said she doesn't expect the company's truck margins to fall steeply if military orders for mine-resistant, ambush-protected vehicles taper off.

Also late Thursday, Navistar said it received a $752 million contract boost from the U.S. Navy for upgraded MRAP vehicles.

Duignan said that order should help keep the company's truck margins strong through the first half of fiscal 2009.

In premarket trading, Navistar shares rose 39 cents to $59.40.