"What have you done for us lately?"

Ungracious as it sounds, that's often the attitude Mr. Market takes when deciding on the appropriate price to accord a stock. You say ExxonMobil (NYSE: XOM) earned $11 billion yesterday? Bully for ExxonMobil, but it missed earnings, and its stock is getting crushed. Home Depot's (NYSE: HD) earnings are down, but it's taking steps to fix the problem? No problem! Bid the shares up in anticipation of a turnaround. In other words, Mr. Market is all about the future.

So what?
I tell you all this so that when you see that high-tech potter Ceradyne (Nasdaq: CRDN) reported nearly flatlined sales and a 13% decline in earnings last week, you'll understand why the shares continue to march upward. The reason, once again, is that (say it with me) Mr. Market is all about the future.

Earnings reports focus in large part on the past. To figure out what Mr. Market sees in Ceradyne, you have to go past the earnings report and find out what happened in the post-earnings conference call -- a task that has become infinitely easier in recent months, now that SeekingAlpha has begun compiling and publishing conference-call transcripts free of charge. Here are a few of the highlights I've cribbed from Ceradyne's call.

The best defense is defense
Much of Ceradyne's popularity as a stock is, rightly or wrongly, predicated on the view that this company lives and dies by the success of its sales to the U.S. military. It supplies ceramic plates for infantry body armor, produces lightweight armor for the military's LTAS program, and has potential contracts to build the second-generation successor to General Dynamics' (NYSE: GD), Force Protection's (Nasdaq: FRPT), Navistar's and BAE's various "MRAP" armored vehicles.

In this regard, the three most prominent near-term revenue drivers for Ceradyne are the military's XSAPI body-armor program, the "BULL" MRAP-II, and the LTAS. On XSAPI, Ceradyne tells us that "everything seems on line for [the five-year XSAPI/ESAPI proposal] awards to take place sometime mid to late Q3," with deliveries beginning most likely in October of this year. Likewise, we're still waiting for word on BULL contracts.

But the most interesting tidbit from the conference call concerned JLTV. According to Armor Operations VP Marc King: "There are significant opportunities for LTAS armor ... unfortunately, nondisclosure agreements prevent me from giving specifics. ... What I can tell you is that there are customer opportunities being worked right now, where those materials are now being turned into product applications for specific vehicles for ongoing testing and use going forward." Don't be surprised if we hear more on this subject soon.

One word: aluminum
Although defense gets the glory, CEO Joel Moskowitz confides that one of his "favorite subjects is aluminum smelting," a business where Ceradyne's products have already booked more orders in Q1 of this year than in all of last year. We're still talking "very little to low millions of dollars projected this year," but Moskowitz argues that aluminum is one of two "billion-dollar opportunities" for Ceradyne -- an opportunity equally as big as the more headline-grabbing prospects for building armored combat vehicles.

Hot as the sun
Aluminum may be Ceradyne's second big moneymaking prospect, but in the race for "sexy," it takes a back seat to yet another market opportunity: solar power. Yes, MEMC Electronic Materials (NYSE: WFR) and Corning (NYSE: GLW) shareholders, Ceradyne is gearing up to help solve the problem of bottlenecks in the global supply of polysilicon.

The products in question are "very high purity fused silica ceramic crucibles that are used in the manufacturing" of the polycrystalline silicon that helps make solar panels. Contrary to my initial belief, these "crucibles" are not at like the pots and pans hanging in your kitchen. Once they're used to whip up one batch of silicon, you don't toss them in the dishwasher to get them ready for another go-round. To the contrary, Moskowitz confirms that these are "single-use products, and therefore, the market is of a continuous nature."

In other words, the cycle from the silica makers' point of view appears to be: Buy a crucible, use a crucible, toss a crucible ... buy a new crucible. These are consumable products, and Ceradyne's market for them is exploding. Management expects to quintuple its 2007 sales to about $53 million this year and then more than double that figure again next year. Ceradyne owns about 30% market share for this product and could potentially grab more as the industry switches from the current 225 kilogram-capacity crucible to a new standard twice as large. Ceradyne's already gearing up to produce the new size in bulk, and as Moskowitz confirms, this is a "very good business for Ceradyne because ... the average selling price is significantly higher than the 225s."

Show me the money
One final word before we close. Products and sales are all well and good, but as investors, we're chiefly concerned with whether our companies earn profits and, preferably, free cash flow. Moskowitz lent some assurance on this score as well, in confirming that Ceradyne "had a $40 million free cash flow in Q1." He added, "We are going to be generating cash all year at something along that rate."

Good to know. And good to know, too, why the stock is going up.