Despite Sprint Nextel Corp.'s (NYSE: S) share price being down more than 50% in the past year, shares were up 7.5% last week -- up 46.5% in the past montyh -- on all the buzz surrounding Sprint lately. There are rumors that Deutsche Telekom (NYSE: DT) may buyout Sprint and merge it into T Mobile. Then there were rumors that Sprint may spin off Nextel (i.e., undo its troubled merger). And there's the excitment around a joint venture with Clearwire Corp. (NASDAQ: CLWR) to create a high-speed wireless internet network that covers most of the U.S.

But when Sprint reports its first-quarter results tomorrow, analysts polled by Thomson Financial expect the company to report earnings of a mere penny per share, down from the same period in 2007 when it earned 18 cents per share, and from the previous quarter's 21 cents per share. The company has beat quarterly estimates over the past year -- by 17.3% in the fourth quarter -- and it certainly has plenty of room to best analysts' low expectations for this past quarter.

Overland Park, Kansas-based Sprint Nextel operates a nationwide digital wireless network with more than 50 million subscribers. In the past year, Sprint's revenues were $40.1 billion. The company's long-term EPS growth forecast is 8.22%, which is less than the 8.67% of rival Verizon (NYSE: VZ) and the S&P 500. The consensus recommendation of analysts continues to be to hold Sprint.

Shares closed Friday at $9.39, up from a 52-week low of $5.48 in March, but still well off the 52-week high of 23.42 last June.

For news that could influence these results, see BloggingStocks' Sprint coverage.

The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.

Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.

Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.

In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.

And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.

The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.

The coming results will reveal if those expectations are correct.

The airlines are now in such great trouble that they are going to their lenders and asking for better terms on their debt. It seems to be working. UAL (NASDAQ: UAUA), parent of United, says it has gotten an improved deal from some of its banks.

According to The Wall Street Journal, "The company said this week its lenders approved a waiver of the so-called fixed-charge coverage ratio covenant on its credit line through the first quarter of 2009." The ratio requires cash flow to stay at certain levels.

The banks are damned if the do and damned if they don't. Other large airlines will likely ask for similar deals. Banks have little options but to agree to improve lending terms.

The debt-holders at the major airlines know that high fuel prices make losses likely and those losses could go on for several quarters. Loan restrictions could cause the companies to move into default.

But the risk of changing loan terms is that the airlines will move into Chapter 11 anyway. Fuel costs could cripple them that much. The banks would have given better deals and have nothing to show for it but worthless paper.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 newsletter.

Billionaire investor Kirk Kerkorian said he may up his stake in Ford beyond 5.5%, as he follows-through on his intention to purchase additional shares, Bloomberg News reported Friday.

Kerkorian, in a Friday SEC filing, reiterated that his Tracinda Corp. will pay $8.50 per share for 20 million additional shares of Ford (NYSE: F), which will give him a 5.5% stake, Bloomberg News reported. In the filing, Tracinda added that it may "from time to time, propose business strategies and, subsequent to the expiration of the offer, acquire additional shares."

Shares of Ford rose 5 cents to $8.25 in Friday morning trading on the news.

A gold star for Ford

Independent stock analyst C. Leonard Bauer told BloggingStocks Friday Kerkorian's stance is "a definite gold star" for Ford, concerning its turnaround program.

"Kerkorian's decision, because of his investment history and knowledge of the auto sector, will telegraph to other institutional investors that it's time to start moderately adding to your Ford position," Bauer said. "Don't misunderstand, this turnaround story is only about 30% complete, but at this stage you can make a good case for buying a modest share amount." Bauer added that he does not have a rating on Ford nor own the company's shares.

Ford installed former Boeing (NYSE: BA) executive Alan Mulally as part of an effort to re-vamp production and revise its fleet to compete in the global auto marketplace. Ford's legacy cost reduction efforts have gone well; fleet revision progress has been slower, many analysts agree.

When one travels in economists' circles, one tends to tap into the issues, controversies and policy ideas 'dismal science' practitioners are debating.

And one issue economists have rattled around concerns the speed of fiscal policy stimulus, or more accurately, the lack thereof. In the digital age, the internet has propelled a host of speed-enhancing changes, and it occurred to this group of economists that U.S. Government policy is decidedly behind the curve in this area.

Here's why: economist David H. Wang noted that the U.S., in an attempt to jump-start its economy stalled by the nation's worst housing slump in more than 15 years, has implemented a host of monetary policy changes to provide monetary stimulus quicker. The U.S. Federal Reserve cut key, short-term interests multiple times during a 10-week span (and later implemented additional rate cuts), and devised two, new, Fed-administered institutions to address the credit crisis, provide liquidity, and ensure the orderly operation of financial markets.

Growth is slowing in all regions of the world, and inflation is rising, but the International Monetary Fund's No. 2 person in charge says a repeat of the 1970s stagflation period isn't likely.

IMF First Deputy Managing Director John Lipsky said the "inflation speed-up must be taken seriously as it creates potentially significant challenges to economic stability," Bloomberg News reported Thursday. However, Lipsky added that a return to 1970s-style stagflation isn't likely, but it cannot be totally ruled out.

Oil, commodity-rooted inflation

Further, Lipsky underscored that the current inflation rise is being driven by a fundamental increase in demand for commodities, primarily oil, and to a lesser extent by supply constraints around the world, Thomson Financial reported Thursday via Forbes.com. Hence, the recent price increases are likely to prove finite, Lipsky added, unless these items keep rising more rapidly than other items.

Economist David H. Wang told BloggingStocks Thursday he agreed with Lipsky's categorization of the most-recent rise in inflation but added that government subsidies may prevent a pullback in commodity prices, especially oil. Classic economic theory holds that as the price of a good rises, people will use less of it. However, governments in China, Venezuela and the Middle East, among other nations, subsidize gasoline/fuel, lowering its cost, which discourages conservation, Wang said. The United States does not subsidize motor fuel at the federal level, but individual states do subsidize heating oil/natural gas for low-income citizens.

George Soros, the billionaire money manager, claims to be old and wise, and able to guess the market's turns better than most. Given the compensation he has collected on Wall Street over his lifetime, it is hard to quarrel with that.

Soros, who still manages several hedge funds, says that the U.S. is in a "bear market rally," according to The Wall Street Journal. Like many pundits, he stakes his claim primarily on the American housing market. If home prices keep up their sharp decline, how, he reasons, can the rest of the economy do well?

He may have a point. Much of what economists have said recently is based on a recession being avoided because consumer spending has slowed but not halted. People are still going to Wal-Mart (NYSE: WMT). Thank goodness for that.

But Soros and his intellectual allies look at a housing market that will continue to decline into 2009 and say that this must force a deeper and deeper downturn.

No one wants to believe Soros. The thought is too grim. But the logic is hard to dispute.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.

The world's third largest music company, Warner Music Group Corp. (NYSE: WMG), reported this morning a wider second quarter loss and suspended a quarterly dividend to strengthen its balance sheet.

Warner Music posted a quarterly loss of $37 million, dragged down by higher costs and lower compact disc sales. Analysts had expected a loss of 12 cents per share, and were disappointed to see the company report a loss of 25 cents per share.

Warner's quarterly revenue rose only 2% to $800 million compared with $784 million a year ago. The company attributed the revenue decline to its recorded-music segment whose sales climbed only 0.6% due to consumers' preferences for digital music. However, the drop in revenue could have been even worse if the recording company hadn't benefited from the weak dollar, Warner stated. Analysts expected revenue of $780 million, according to Thomson Reuters.

Bloomberg News reports that consumer borrowing -- as measured by credit card receivables -- grew much faster than expected in March. Specifically, the 9% growth to $2.56 trillion was twice the rate of increase that economists had expected (the actual increase was $15.3 billion vs. 34 economists who expected $6 billion). The March figures brought U.S. consumer borrowing in the first quarter to $34 billion, the most since the first three months of 2001, when the economy entered its last official recession.

And as consumers are increasing their indebtedness, they are also having more trouble paying it back. Overdue payments at the six largest U.S. credit-card lenders reached the highest level since November 2004, according to data compiled by Bloomberg. It found an average of 4.11% of loans were at least 30 days late in February and March.

Bloomberg quotes Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York who says it all: "incomes are not keeping up with inflation and this is leading them to rely increasingly on credit to see them through the worst housing downturn since the Great Depression. The days of extracting cash from one's home to spend on goods and services are long gone."

With consumer spending accounting for 70% of GDP growth, that's why I suggested selling into the sucker's rally that peaked last week.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

If you are like me, you are probably getting pretty tired of reading bad housing news day after day, so today it is nice to bring you some good news on the housing market, as mortgage applications rose last week for the first time in three weeks.

According to the Mortgage Bankers Association, the week ended May 2 saw a 15.6% jump in the association's index of mortgage applications. The index takes into account both new purchase as well as refinance loans.

It is a good sign for the housing market, which is entering into its peak buying season. Perhaps this is the moment we have been waiting for, when buyers are finally ready to come back into the market and sweep up some heavily discounted houses. Home prices have been steadily falling for the past year, but signs are starting to point to a possible stabilizing early in 2009.

Transocean Inc. (NYSE: RIG), the world's largest offshore drilling contractor, reported its first quarter earnings this morning, and surprised Wall Street by posting a profit that more than doubled for the quarter.

The company said its quarterly profit jumped to $1.19 billion boosted by soaring crude oil prices. The offshore drilling contractor also benefited from strong sales from its acquired competitor GlobalSantaFe Corp. Going into today's earnings announcement, analysts had been expecting the company to post a profit of $3.33 a share, but Transocean surprised everyone by earning $3.80 a share during the quarter. This is a nice rebound from the same period last year when the the world's largest offshore oil driller reported earnings of $2.62 a share.

Looking at revenue, Transocean said its quarterly sales sales more than doubled to $3.11 billion, compared with $1.33 billion in the same period a year ago, helped by strong sales from GlobalSantaFe. Analysts, on average, were expecting the company show $3.05 billion in revenue, according to Thomson Reuters.

Sales of existing homes in fell 1.0% in March 2008, the National Association of Realtors announced Wednesday, as the prospect of continued home price declines discouraged potential buyers.

The NAR's existing home sales index declined to 83.0 in March 2008. The index totaled a revised 83.8 in February 2008, and stood at 103.9 in March 2007.

Economists surveyed by Bloomberg News had expected the March 2008 existing home sales index to drop to 83.8%.

Regional conditions vary

Conditions varied by region. In the Midwest, the index fell 10.4% in March 2008 to 74.1; in the West, the index fell 1.4% to 91.2, and in the South, it fell 0.1% to 84.9. In the Northeast, the index rose 12.5% to 80.8%.

Disney (NYSE: DIS) did better than expected. According to the company, EPS rose 35% to $.58. Revenue was up 10% to $8.71 billion. Wall Street focused on the success of Disney's theme parks, believing they are a good indication of consumer spending. If so, economists should be happy.

Revenue for the company's parks and resorts moved up 11% to $2.725 billion. Operating income was up 33% to $339 million.

Nice picture, if it is true.

The consumers who go to Disney theme parks tend to be affluent. That is in the sense that they can spend several hundred dollars or more on tickets, food, and hotels. That leave out all of the people who did not come. That would include those who could not afford the airplane tickets, gas, and toys for their kids.

Economists will seize the theme park numbers and hail them as good news. They will say the consumer is OK. But, the increase in revenue for these operation was less than $300 million. That is hardly a bounce in the consumer sector.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Cisco (NASDAQ:CSCO) did just fine in its last period. For the fiscal second quarter, the company reported a 7.2% increase in net and a 16.5% increase in revenue. Both numbers hit or bested forecasts.

But, it was Cisco's look into the future which troubled Wall St. Some sectors did unusually well. Emerging markets revenue moved up 44%.

The company did not post a robust forecast John Chambers, Cisco's CEO "Cisco had experienced an increase in caution among U.S. and European customers, with orders dropping off in January after a strong December," according to The Wall Street Journal

The Cisco predictions say a great deal about what is likely to be going on in telecom and cable spending. Its switches and routers run much of the broadband internet. Wall St. had assumed that large US companies in the sectors would accelerate spending to meet customer demand for faster internet service. Instead, they are tapping the breaks. This is an indication that corporations in the sector are willing to use their old "plants" for awhile longer and give consumers a bit less than they want, of, worse, that consumer spending is trailing off.

If the consumer is pinched when it comes to telephone and TV service, then the overall economic downturn has a ways to go.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

It wasn't that long ago that Wall Street was in love with Crocs, Inc (NASDAQ: CROX), the maker of the trendy slippers that took the world by storm last year. After going on a tear for most of 2007, the stock started to break down last November, and has been in a tail spin for the past 5 months.

The company is going to be reporting its first quarter numbers tomorrow after the market close, and all signs are pointing to yet another troublesome quarter for the company. Earnings.com is showing Wall Street estimates of 10 cents a share, but that number does not really hold too much water after the company announced a much weaker forecast last month in its preliminary release.

Last month, CROX shocked Wall Street when it said that it expected to see a 5 cent per share loss in the quarter, and revenues falling somewhere between $195 and $200 million. After that news came out, the already troubled stock took a serious nose dive, and gave up around 40% of its value.