With a market seemingly desperate to grab onto anything upbeat -- such as an oversized rate cut, a slowdown in the rate of foreclosures, or O.J. Simpson coming clean -- Sprint Nextel (NYSE:S) did little to distract investors from other daily dramas such as the subprime turmoil, $96 oil, and surging gold prices.

The third-largest wireless carrier in the U.S. announced a quarter that it would probably rather forget -- one marked with a 4% drop in revenue and 77% plunge in income from continuing operations. As the company announced a few weeks back, when the board booted CEO Gary Forsee, a net 337,000 of its best customers (direct customers on post-paid plans) defected to invigorated competitors such as AT&T (NYSE:T) and Verizon Wireless, a joint venture of Verizon Communications (NYSE:VZ) and Vodafone (NYSE:VOD).

One positive increase in the quarter was a 68% rise in free cash flow to $1.3 billion, with the company having curtailed capital expenditures below planned levels. Interim chief Paul Saleh indicated that future capital spending would also fall below past guidance levels, as the company focuses more on increasing cash flow. Obviously, this cutback doesn't bode well for efforts in launching WiMAX-based services with partner Clearwire (NASDAQ:CLWR) in new markets, though Saleh gave no details on any changes in this area.

Saleh was mum about the search for a new CEO, but he did speak at length about efforts aimed at turning the company around. While improving customer care is a primary focus to keep subscribers from bleeding away, Sprint Nextel also has several new handsets coming that will square off with Apple's (NASDAQ:AAPL) iPhone and sleek Nokia (NYSE:NOK) handsets that other carriers offer.

In the near term, however, Sprint Nextel will probably not be buying back significant amounts of shares. Citing macroeconomic conditions, the company is now taking a "conservative" approach to buybacks, even with $2.5 billion still outstanding under a $6 billion authorization. Now, I know the company would never come out and state blatantly that it thinks its stock is going to fall further, but the buyback approach is pretty darn close to it.

Unfortunately, Sprint Nextel can't hide the blemishes anymore. And even though it appears to be working feverishly to address problems, this Fool isn't convinced that the company is on the upswing yet.

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Fool contributor Dave Mock owns no shares of companies mentioned here. He is the author of The Qualcomm Equation. The Fool has a disclosure policy.