Hey Rocky, watch me pull another bear out of my hat. . .

You can't blame Rocky Shoes & Boots (NASDAQ:RCKY) investors for walking out on the company. The outdoor footwear specialist announced that its government contract to provide hot-weather boots for the military was being terminated. Making matters worse, the company is also lowering its near-term profit outlook.

The company is now looking to post earnings between $2.21 and $2.25 a share for 2005. That's not necessarily awful news, given that the company's earlier guidance had Rocky producing net income per share between $2.25 and $2.29. However, the crystal ball gets ugly in a hurry now that Rocky is looking to earn between $2.35 and $2.45 per share here in 2006. It had originally expected to turn a profit of better than three bucks a share.

No one likes a party pooper, with or without a snazzy pair of rugged work boots. The company lost a military contract in 2001 and suffered a 14% decline in sales the following year. Could this be a repeat? If so, let's not assume that it will end badly. Opportunistic investors who took advantage of the stock's weakness back then came out ahead when Rocky went off to ultimately roll out eight straight quarters of growing profitability.

Going by the company's outlook, it's not as if earnings will be pulling into reverse here in 2006. They just won't be growing much. That is, of course, if the company doesn't spring another downward revision on its investors. You can't dismiss the possibility, because blindsided companies have a knack of being blindsided again. The company is shelving a secondary offering it had planned, which makes one wonder how much lower its profit target for 2006 would have been had it carried out the dilutive offering.

But let's approach Rocky from a value perspective. I'm not going to suggest that the Inside Value newsletter camp is going to get giddy about the stock, but it is trading at just nine times trailing earnings and possibly as cheap as eight times forward profitability. Rivals Timberland (NYSE:TBL) and Wolverine (NYSE:WWW) are trading at considerably loftier multiples. Inside Value guru Philip Durrel obviously has more intricate weighing tools than just P/E ratios to ferret out bargain picks, but that can usually be a decent place to start the digging process.

Yes, it's a shame that Rocky is missing out on the government contract. Just check out how LaCrosse Footwear (NASDAQ:BOOT) fared in 2004 to see the favorable tailwind behind a military boot contract. But Rocky is still growing and now dirt-cheap, trading at levels unseen since 2004. You don't need a kick in the pants from one of Rocky's steel-tipped boots to show you that much.

Longtime Fool contributor Rick Munarriz can't remember when the Rocky movie series jumped the shark, but it happened fairly early on. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.