"Hooker 3Q Profit Nearly Doubles." So proclaimeth the headline from AP's story on Motley Fool Hidden Gems pick Hooker Furniture (NASDAQ:HOFT), which helped to kick off the latest edition of earnings season with a report late Wednesday afternoon. But this morning, Fools may be wondering: If profits were so good, why is the stock down 2%?

Let's find out. In the third quarter of 2006, Hooker booked $0.10 per share in profits under GAAP. That's nearly twice the $0.06 per share it recorded in Q3 2005 -- but it's only half the story.

Looking deeper, we can see that at this time last year, Hooker's earnings were depressed by a $0.25-per-share (after-tax) charge to earnings, recorded to cover the costs of closing down its Pleasant Garden, N.C. plant. When Hooker nearly doubled those profits to $0.10 per share this quarter, it did so despite taking a $0.15-per-share charge (again, after taxes) to close yet another plant -- this time, in Roanoke, Va. Net out the charges for plant closures, and the firm's profit picture looks a lot less attractive: $0.31 per share last year, and $0.25 per share this year, for about a 20% decline.

Yesterday's news looks even worse in light of CEO Paul Toms' implication that by the time we get through the current fourth quarter of fiscal 2006, third-quarter results will look rosy by comparison. Despite noting that "business has improved marginally since August," Toms warned that in the firm's fiscal Q4, "we are up against a strong fourth quarter last year."

That sounds bad enough, but to this Fool's mind, the statement isn't just an earnings warning, but a disingenuous one to boot. "Strong" is not at all how I remember Hooker's Q4 2005. On the contrary, here's what I wrote one year-minus-one quarter ago:

Hooker finished its fiscal year not with a bang, but with a whimper. Sales were down 3% for the quarter; net income fell 38%. Ouch. And the news for the year was similar: sales down 1%, net income down 35%. Quadruple ouch. The predictable sell-off began after market close last night, and continues as of this writing, with the stock having already fallen 12%.

("Strong," Mr. Toms? Perhaps in the sense that a hunk of moldy French cheese has a "strong" smell. Last year's fourth quarter stank to high heaven.)

Now, fast-forward nine months, and here comes Hooker, spritzing perfume on its outlook while warning that next quarter won't even measure up to last year's performance. Look out below, folks.

Read the whole Take on last year's Q4 in "Hooker Furniture Marked Down."

For an update on the rest of the furniture makers, featuring Bassett Furniture (NASDAQ:BSET), Stanley (NASDAQ:STLY), Ethan Allen (NYSE:ETH), and Furniture Brands (NYSE:FBN), read "Furniture Struggles With Its Brands."

Hooker Furniture to the contrary, Tom Gardner and Bill Mann's market-beating Motley Fool Hidden Gems newsletter service specializes in finding boring but brilliant businesses with huge profit potential. See Tom and Bill's latest selections, and all their previous picks, with a free 30-day trial.

Fool contributor Rich Smith does not own shares of any company named above. The Fool's disclosure policy smells like roses.