Shares of truck maker Navistar International (NAV) are rising despite reporting earnings earlier that missed analyst expectations on the top and bottom line. The company said it anticipates the regulatory review of its planned accord with Volkswagen (VLKAY) to be completed early next year.

EARNINGS MISS EXPECTATIONS: Amid weaker demand for heavy trucks, Navistar reported a fourth quarter loss of (42c) per share on revenue of $2.06B. Both EPS and revenue missed analyst expectations for EPS of 26c and revenue of $2.17B. Navistar revenues for Q4 declined 17% largely driven by an 18% decline in the company's Core charge-outs, to 13,000 units. Navistar noted that the decline largely reflects continued softening of Class 8 industry volumes in the U.S. and Canadian markets. Q4 EBITDA was $95M versus EBITDA of $86M in the same period one year ago. This year's Q4 included $9M in net charges for asset impairments and restructurings, and $8M in pre-existing warranty adjustments. As a result, adjusted Q4 EBITDA was $112M. "Although we expect tough industry conditions to continue through the first half of 2017, we see further opportunities to continue to reduce our break-even point, including leveraging some early cost synergies from the Volkswagen Truck & Bus alliance," said CEO Troy Clarke. "The alliance announcement has been positively received by our customers, which when combined with our ongoing cadence of new product offerings, confirms our confidence in our improving standing in the market." 

GUIDANCE: Navistar sees retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be in the range of 305,000 units to 335,000 units for fiscal year 2017. the company sees fiscal year 2017 revenue to be similar to 2016.

VOLKSWAGEN TRUCK & BUS ALLIANCE: Navistar provided an update on its pending strategic alliance, confirming that all appropriate regulatory filings have been made, and that it has already received antitrust approvals in the United States and Poland. In addition, other regulatory approvals are pending, and other agreements between the parties that constitute closing conditions remain on track, including final terms for the procurement joint venture and the companies' first powertrain collaboration, the details of which will be announced soon after the closure of the alliance. The company expects the transaction to close in the first quarter of calendar year 2017.

PRICE ACTION: Shares of Navistar are up 0.34% to $29.82 per share.