When most investors think about AB Volvo (NASDAQ:VOLVY), they probably think about the slightly boxy cars that soccer moms used to drive before SUVs became all the rage. While that may be understandable, it's also incorrect -- Volvo sold its namesake car business to Ford (NYSE:F) long ago so it could focus on its truck (including Mack Trucks), construction equipment, aircraft, and other business units.

All the same, investors might have been longing for some of that fabled Volvo security on Monday. Due in large part to a weak outlook for trucks, the shares skidded more than 8% in fairly heavy trading.

On first blush, it was actually a pretty good quarter -- a record, in fact. Sales were up 15%, operating income was up 37%, and EPS climbed 45% for the quarter. Sales were strong, margins were strong, and the company was free cash flow positive.

Trucks led the way, and this is far and away its biggest business (roughly two-thirds of revenue). Sales in this sector were up 18%, led by 35% growth in North America and followed by 4% growth in the company's larger European market. Margins expanded as well. The company's bus and construction equipment businesses also performed well, although the marine and aircraft businesses were less robust.

What I believe spooked the market was the company's guidance on the future of the truck business. Management actually raised its expectations for 2005 growth in North America from 15%-20% to 20% or more and reiterated its guidance of flat to 5% growth in Europe. So there's no new bad news there.

Looking at order bookings, though, total truck bookings were down 10%, with North American bookings down 18% and European bookings down 14%.

I believe that's the surprise -- I don't think people expected bookings to be down that much, especially in North America. While management believes some of this might be due to the order cycle (customers holding off for the new 2006 models), investors were clearly more skeptical.

This also sent some ripples through the industry. Navistar (NYSE:NAV) was down over 2% on the day, Paccar (NASDAQ:PCAR) was down nearly 2%, and Cummins (NYSE:CMI) was also down, although not enough to suggest a strong link.

These are, of course, the good days for truck builders, and sooner or later the peak of the mountain will arrive, and the road downhill will begin. Whether Volvo's now past that peak or not, I can't say.

As for the stock, a 4% dividend yield is pretty enticing, but a 4% annual yield is cold comfort on a day when the stock drops more than 8%.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).