Several manufacturing heavies are coming out with their quarterly earnings next week. One that I'm particularly interested in is truck maker PACCAR (Nasdaq: PCAR). It earned $0.53 per share in the first quarter last year. Analysts are expecting earnings to be 47% higher this time at $0.78 per share. What is it that's making everyone so optimistic about PACCAR?

Delivering more
I won't be surprised if PACCAR reports high truck deliveries in its first quarter. Truck tonnage has been on an upward trend lately. After climbing 5.9% in 2011, it was up 3.1% in January and 5.5% in February, both compared to respective periods last year. The recently released American Trucking Association Annual Trend Report clearly reflects a rebound in the trucking industry.

PACCAR should benefit from all this, something that will perhaps be reflected in a fatter top line. Analysts are expecting revenue to surge by 35% in the quarter.

Class 8 is where all the action is
One of the big events that should find mention in PACCAR's earnings call is the launch of its next-generation truck models last month under the brands Kenworth (Model T680) and Peterbilt (Model 579). PACCAR has already bagged orders for 1,000 T 680s.

These trucks belong to the heavy- duty Class 8 segment-- a big revenue driver for the company. Market share of both brands in the American and Canadian Class 8 market hit a record high of 28.1% last year, driving PACCAR's fourth-quarter revenue to a historical high of $4.85 billion. The good news is that things continue to look upbeat.

Better than the other
Total U.S. Class 8 truck sales were at 15,418 units in February, up 59% from the comparable period last year. March was even better, with 17,308 trucks being sold, marking the 27th consecutive month of year-over-year sales growth. Year-to-date, Class 8 sales have risen 46.6% from the year-ago period.

PACCAR's trucks have been doing particularly well when compared to peer Navistar International (NYSE: NAV). The table below gives us an idea of the rise in Class 8 truck sales reported by both companies in the first three months of this year.


% Rise From Comparable Month Last Year




Navistar International 27.3% 75.9% 48.3%
PACCAR Peterbilt 74.0% 98.5% 77.6%
PACCAR Kenworth 59.0% 132.5% 93.2%

As you can see, PACCAR's brands have notched up much higher sales. This pace leads me to expect another set of good numbers from the company in its forthcoming release.

Moves to track
PACCAR recently announced plans to fit a wider range of trucks with the new heavy-duty engines made by Cummins (NYSE: CMI) in collaboration with Westport Innovations. The use of these engines will enable PACCAR to cash in on the rising popularity of natural gas as a fuel. I am looking forward to further clarity on this move and other upcoming plans in the forthcoming earnings call.

A persisting pain
Europe, which accounts for nearly one-third of PACCAR's revenue, continues to be a concern. PACCAR's DAF unit (which is a big truck producer in Europe) has, in a cautious move, reduced its production by nearly 20%. This is likely to hurt PACCAR's deliveries in the first quarter.

The Foolish bottom line
PACCAR is going to spend a major chunk on its new DAF facility in Brazil. With construction beginning early this year, a report on its progress is another thing I'll be looking out for in the earnings call.

I can't wait to cover PACCAR's earnings in detail. In the meantime, to get more earnings-season insight, check out our brand-new free report: "5 Stocks Investors Need to Watch This Earnings Season." It details what to look for from Apple and four other must-watch companies as they report their latest results. Get access right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.