Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Considering its name, you might be surprised to learn that Carpenter Technology (NYSE: CRS) actually does more metalwork than woodworking -- or that it does it for the aerospace industry. Investors certainly seem surprised by the company's results this morning, sending the shares up more than 10% on an earnings report that looked just "plane" wonderful (a dual entendre pun, yours free of charge.)

So what: All together now: "How wonderful was it?" Carpenter earned $0.64 in fiscal Q3 2011, a near 12 times improvement over the plug nickel it reported earning in last year's fiscal third quarter. Granted, $0.11 of the improvement came in the form of a tax benefit, but still -- that's mighty impressive performance.

Now what: Carpenter's firing on all cylinders, with all seven of its key business segments reporting improved results in the third quarter. That said, if there's one thing that worries me about the stock, it's its price -- not the "90 P/E" that Yahoo! Finance is showing, mind you. The free cash flow.

Based on the most recent data, Carpenter has managed to burn through more than $57 million in free cash flow over the past year, even as it reported $51 million in profits under GAAP. Conventional wisdom would tell you to focus on the latter and buy the stock on today's strength and tomorrow's promise. Foolish investors will want to take a closer look, however, and make sure this story is really as good as it looks.

Think Carpenter looks sharp? Add it to your Watchlist.

Fool contributor Rich Smith does not have any position in any company named above. The Motley Fool has a disclosure policy.

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