What happened

Paccar Inc. (PCAR -2.26%) was on its way to a strong year when October happened. Shares of the truck maker got caught in the broader industrials sell-off, and even better-than-expected quarterly earnings backed by exceptionally strong trucking markets couldn't help investors shrug off their pessimism. Paccar stock finally ended October down 16.1%, according to data provided by S&P Global Market Intelligence, and has barely budged so far this month.

So what

Orders for heavy-duty Class 8 trucks in North America are sitting at record highs, with October likely to be the eighth straight month of industry orders of more than 40,000 units, according to research firm FTR. As a leading truck manufacturer in the U.S., Paccar is making the most of the good times, as evidenced by its third-quarter numbers that were released on Oct. 23.

A lineup of trucks.

Image source: Getty Images.

In Q3, Paccar's production hit record highs, revenue climbed 14% to $5.76 billion, and net income soared 35% to $545.3 million. While the company didn't give out its backlog value, CEO Ron Armstrong revealed that Class 8 orders for Paccar's flagship truck brands, Kenworth and Peterbilt, more than doubled during the first nine months of the year compared with the year-ago period. Meanwhile, in Europe, Paccar's DAF brand achieved record market share of 16.6% in the above-16-tonne market, up from 15.1% same quarter last year.

Given those numbers, it appears fears of escalating trade tensions between the U.S. and China and concerns about the trucking cycle peaking triggered a sell-off in Paccar shares in October.

Now what

While we can't say much about how long the trade war will last or how badly it'll affect Paccar, the trucking markets remain on a strong footing. Barely days ago, FTR raised its forecast for 2019 North American industry Class 8 truck shipments, as it foresees robust freight growth.

Paccar, for its part, is chalking out plans to increase capital expenditures in 2019 by nearly 20% of the projected 2018 midpoint of $450 billion on new truck models, diesel and powertrain technologies, and capacity expansion for both trucks and parts. So if not for the broader market sell-off, October would've likely been a smoother ride for Paccar.