Editor’s Note: The following is an analysis by Forbes on Thor Industries Inc.’s earning potential. To view the entire article click here.

How do we know the economy is improving? RV sales are up. Thor Industries (THO) is expected to grow earnings by the double digits in fiscal 2012.

Shares have been on a tear in 2012 but this Zacks #1 Rank (Strong Buy) still has some value with a price-to-book ratio of just 2.4.

Thor is the largest manufacturer of recreational vehicles in the United States. It makes both motorhomes and towables including the well-known Airstream. It also makes commercial buses and ambulances.

Second Quarter Sales Jump 13%

On March 8, Thor reported its fiscal second quarter results and saw earnings rise 150% to 25 cents from 10 cents a year ago. However, the analysts got a little too optimistic after the preliminary sales results were announced in February, as the company missed on the Zacks Consensus by 2 cents.

Sales jumped 13% to $596.9 million from $526.2 million a year ago. RV sales, the largest segment, rose 15% to $500.9 million from $437.1 million a year ago. Towable RV sales are proving to be more popular, with sales up 22% to $444.2 million. Motorized RV sales went the other way, falling 21% to $56.8 million. Bus sales also rose, gaining 8% to $96 million.

In February, Thor said the backlog actually fell to $647 million as of Jan 31, 2012 from $689 million a year ago due to a fall in the RV backlog.

Outlook for Fiscal 2012

The second quarter has historically been the most difficult for the company (on a seasonal basis.) Fewer people want to buy an RV during the winter, apparently. However, the company still saw “strong retail activity” over the first two months of 2012. The Recreation Vehicle Industry Association (RVIA) is seeing better sales on the horizon as it recently revised its 2012 wholesale RV shipments higher to a 5% improvement over 2011.

One fly in the ointment, however, could be rising fuel prices. The higher gas prices go, the less likely consumers are to buy an RV.

Despite the danger from rising gasoline prices, the analysts are still bullish about fiscal 2012. Three out of five estimates have moved higher for 2012 in the last 30 days. The fiscal 2012 Zacks Consensus Estimate has also risen to $2.27 from $2.17 in the last 60 days.

That is earnings growth of 26% compared to fiscal 2011 where the company made just $1.81. This is a big turnaround from the height of the recession, in 2009, where Thor Industries made just 41 cents.

To view the entire report click here.