Some things would be so nice if they were just literally true. Take, for instance, this line from the summary of Titan's (NYSE:TTN) second-quarter 2004 earnings release: "Net loss available to common shareholders." Wouldn't it be nice, as a shareholder, to be able to say, "Hmm. Thanks for offering, and I understand the loss is 'available' to me and all, but I think I'll pass."

Sadly, not everything means exactly what it says, and Titan's shareholders don't really have any choice in this matter. The quarter's $0.79 per share loss is theirs, like it or not. (Lockheed Martin (NYSE:LMT) shareholders, on the other hand, have dodged the bullet on this one.)

The earnings report had good news, too, of course. Year-on-year, Titan's earnings rose 19% to $515 million, and its order backlog increased to $5.6 billion.

However, this quarter's revenues don't appear to be as profitable as those from a year ago. Titan noted that its operating margin decreased to 6.6% from last year's 7.3% -- and lest you ascribe the decline to Titan's hefty legal and auditing bills incurred while trying to merge with Lockheed, Titan pointed out that these were pre-mergercost margins.

Of course, the merger costs and the costs of first defending then settling the charges brought by the SEC and Department of Justice more than offset Titan's operating profit. Titan set aside $25.5 million to cover the likely cost of settling the Feds' charges -- more than eight times what the company had originally anticipated -- and noted expenses of $8.8 million, mainly for legal fees. It also warned that more such fees will be incurred in future quarters. (Remember, the merger may be kaput, but the government investigations are ongoing.)

Speaking of ongoing, Titan also gave its predictions for 2004 and 2005 profits. For 2004, Titan expects to just about break even on cash from operations, and to earn somewhere between $0.02 and $0.12 in GAAP profits. For 2005, with its legal woes hopefully a fading memory and the company able to focus on its business, Titan expects cash from operations to be in the $100 million range, with GAAP profits of about $1 a share -- giving it a forward P/E ratio of 12 and a PEG somewhere between 0.75 and 1.33.

Assuming Titan sees its future more clearly than it saw the danger of a federal investigation derailing its merger, it would appear that by charging $12 for a share of Titan, the market is valuing Titan pretty fairly right now.

Fool contributor Rich Smith has no interest in any company mentioned in this article.