By midafternoon, shares had taken off 4.3% to $36.17.
The company, which makes commercial and military trucks, reported a quarterly net loss of $2.81 a share for the three months to January.
Analysts surveyed by Thomson Reuters had anticipated a net loss of $1.77 a share.
Revenue fell 15% year over year to $2.21 billion, compared to consensus of $2.6 billion.
"We signaled that this would be a tough quarter due to our mid-range product transition, the ongoing reduced sales in our military business, and because the first quarter, historically, represents the weakest operational period of the year for us," said CEO Troy Clarke in a statement.
"Clearly, we have more hard work to do to rebuild our market share and further reduce our costs, but we continue to make progress ... and we feel we're off to a solid start in 2014."
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TheStreet Ratings team rates NAVISTAR INTERNATIONAL CORP as a Sell with a ratings score of D+. The team has this to say about their recommendation:
"We rate NAVISTAR INTERNATIONAL CORP (NAV) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins."
- You can view the full analysis from the report here: NAV Ratings Report