Oakley's (NYSE:OO) second-quarter report last Wednesday saw a decline in profits by $0.04 a share year over year. At a profit of $16 million, or $0.23 a share, it missed analysts' forecasts by one cent. And these forecasts were already revised from the original $0.31 per share predicted before Oakley lowered guidance for full-year earnings on July 12. All this resulted in a sharp decline in Oakley's stock price by 25% this month, with no fewer than four analysts downgrading the company.

In the light of all this news, one has to wonder whether Oakley founder and CEO Jim Jannard was wearing rose-tinted (sorry, make that ruby iridium) glasses when he revealed his intent to buy up to 2 million shares, subject to market conditions. Investors reacted well to his announcement, with Oakley gaining $0.64 yesterday, stopping the stock's slide.

Jannard cites an upcoming product named the "Thump," which features an MP3 player incorporated into eyewear, as a source for optimism. His enthusiasm complements Oakley's presentation at the CIBC Consumer Growth Conference of July 14, where management stated expectations of strong earnings contributions from the Thump's release in the fourth quarter.

This product, scheduled for launch this December, is definitely not for the mass market. At the suggested price of $395 for the 128 MB version, consumers can buy a cheaper model of Oakley sunglasses and an Apple (NASDAQ:AAPL) iPod Mini, a combination that will offer more flexibility, not to mention much more storage capacity. What the Thump does offer is novelty and a wireless listening experience (all the audio circuitry is built into the frame of the sunglasses). Whether there are people willing to pay through the nose for eyewear like this is anyone's guess.

From its presentations, it seems that Oakley is banking on the Thump to add some gloss to a year looking increasingly lackluster. It would be absurd to place so much hope in a new hybrid product whose market appeal is yet to be determined. The Thump may well turn out to be all sound and fury, signifying nothing to Oakley's bottom line.

Since our last look at Oakley, there have been no real developments that suggest a reversal of fortunes. Jannard's decision to put his money where his mouth is is commendable, but investors may want to take a long uncolored look at the numbers before joining him.

Fool contributor Tim Goh has owned Oakley X-Metal Pennys but does not have a penny in Oakley Incorporated.