At first glance, the earnings report that vehicle- and soldier-armorer Armor Holdings (NYSE:AH) put out last night looks like pretty good news, or at least as good as could be expected.

As investors in any number of armor manufacturers -- Armor Holdings, tiny competitor DHB (AMEX:DHB), or even ceramic plate maker Ceradyne (NASDAQ:CRDN) -- now know, Armor Holdings took a massive hit to earnings in Q3 2005 following its voluntary recall last August of thousands of its bulletproof vests containing Zylon brand fibers. In all, the recall cost Armor Holdings an after-tax charge of $0.33.

Yet even with that charge, the company managed to eke out a small increase in profitability for the quarter, boosting profits per diluted share by 6%. While it's certainly a disappointment to investors who hoped to see the company wring more profits out of the quarter's 74% revenue rise, achieving any profit increase at all after the recall charge seems a miracle.

The company's cash flow numbers and forward guidance were less miraculous. Q3 saw Armor Holdings' free cash flow of yesteryear dry up entirely and reverse course. In contrast to Q3 2004, in which the company generated $9.9 million in free cash flow, Q3 2005 saw $1.5 million flow back out the door. That makes for a sizeable, and not terribly attractive, contrast to the company's $26.5 million in GAAP net income for the quarter.

Yeah-sayers might point to Armor Holdings' promise to reverse that trend in Q4 and end the year with $100 million in free cash flow. If the company achieves that target, those yeah-sayers will be proven undeniably right.

For a time.

Consider that, after its vest-recall charge, Armor Holdings now expects to earn somewhere between $3.55 and $3.65 per share in GAAP profits this year. Had the recall never taken place, Armor Holdings would have been expecting more like $3.88 to $3.98 in per-share profits.

Which is lovely for this year, but makes next year look all the uglier in comparison. Next year, you see, Armor Holdings' guidance suggests that the firm is targeting a repeat of this year's $3.55-per-share earnings. In other words, the company is aiming to achieve no organic earnings growth next year. Worse yet, on the pro forma (Latin for "make a wish") basis that public companies love to use, earning just $3.55 next year would make for about a 10% year-on-year decline from what Armor Holdings would have earned this year, absent Zylon-gate.

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Fool contributor Rich Smith does not own shares of any company named above.