Navistar International (NYSE:NAV), the company formerly known as International Harvester and heir to the famous McCormick reaper, has been through its share of bearish times, and the past few years have been pretty brutal. The firm has posted net losses since 2001 with a whopping $8.88 per share loss in fiscal 2002 (though it did recover substantially in fiscal 2003, losing only $0.27 a share).

So today's report of more red ink may really just be some good news in disguise. For 2004's first quarter, Navistar narrowed its loss to $0.34 per share, which is an improvement over last year's negative $1.49 per stub for the same quarter. The loss was better than either analysts or management had expected.

The firm attributed some of the success to stronger sales, which were up 19% to $1.9 billion. But even better, the company's gross margins on manufacturing moved up to 12% from 5.3% a year ago.

Management seems pretty enthusiastic about the results, and this morning issued improved full-year guidance based on some rosy sales projections. For 2004, Navistar looks for its retail sales to increase as much as 25% for some of its many product lines, which include heavy trucks, buses, and medium-sized trucks for delivery, waste management, and other uses.

The company aims to return to profitability this year, and it has made a lot of its future plans to eventually hit $15 billion in sales, which would double recent results. It's a worthy goal, but one that won't be easy to achieve in a crowded field. There's global competition from the likes of DaimlerChrysler (NYSE:DCX), Ford (NYSE:F), GM (NYSE:GM), and Paccar (NASDAQ:PCAR).

Navistar made it through the lean years with respectable balance sheets, and there's enough cash on hand to weather a few more storms, should they arise. At $47 per share, the firm trades at 18 times estimates for 2004. Whether or not you think the stock is worth that price ultimately depends on your faith in an improving economy.

Wondering if a used Navistar bus might make a good ride for your family? Run the idea past fellow Fools in the Buying and Maintaining a Car board.