Earnings Preview: Nike

Nike Inc. reports earnings for the fiscal fourth quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Athletic apparel and footwear maker Nike Inc. is gearing up for the 2008 Beijing Olympics in August.

Expected marketing expenses for major sporting events including the Olympics and the European soccer championships will be reflected in the fourth quarter.

During the quarter, Nike launched a line of footwear, apparel and equipment focused on young athletes, including a partnership with a specialty company called Sparq Training.

The company introduced Sparq cross trainers, which compete with Under Armour Inc.'s recently launched New Prototype cross trainers.

Meanwhile, Nike and Apple are making the iPod compatible with gym equipment. The companies are working with several gym equipment makers and the health clubs 24-Hour Fitness and Virgin Athletic Health Clubs to allow members to plug their iPod Nano into cardio equipment. The Nanos would track workouts, set goals and upload the information to a Nike Web site.

BY THE NUMBERS: The company did not provide guidance for the quarter. Analysts polled by Thomson Financial, on average, expect a profit of 96 cents per share on revenue of $4.95 billion.

ANALYST TAKE: Thomas Weisel Partners analyst Jim Duffy, who rates Nike "Overweight," said sales of higher-priced technical footwear seem to be improving.

"Large U.S. retailers, including Foot Locker, Finish Line, and Dick's all highlighted strength in the Nike brand, with high-priced running shoes, basketball shoes, and Converse all reportedly selling well," Duffy wrote in a recent client note.

He expects results will benefit from "strong momentum" from performance footwear in the U.S., continued strength in emerging markets and the benefit of a weaker dollar.

Lehman Brothers analyst Robert Drbul, who rates Nike "Overweight," expects strong international growth _ he said 60 percent of Nike's sales are international _ will mitigate a weaker U.S. retail environment.

"We believe Nike, with its wide geographic reach and various growth opportunities, remains well positioned to meet its long term targets," Drbul wrote.

WHATS AHEAD: Though not an official sponsor of the games, Nike will dress thousands of athletes from more than 100 countries in the August Beijing Olympics.

STOCK PERFORMANCE: Shares rose 14 percent to finish the quarter ended May 31 at $68.37. The stock has since slipped about 2.4 percent, ending Friday at $66.73.