Sprint Nextel's Revenue Falls

Sprint Nextel (S Quote) beat Wall Street's bottom-line estimates for the first quarter Monday, although the company missed revenue targets due to its struggling wireless business.

The Overland Park, Kan., communications provider posted a first-quarter loss of $505 million, or 18 cents a share, more than doubling the loss of $211 million, or 7 cents a share, in the year-ago quarter.

Excluding charges related to merger activities and severance costs, Sprint earned 4 cents a share during the quarter, topping the consensus estimate of 2 cents.

However, Sprint said net operating revenue declined 8% from a year ago to $9.33 billion. Analysts forecast revenue of $9.41 billion, according to Thomson Reuters.

Sprint's wireless division saw revenue decline 9% from the same period a year ago to $7.96 billion, as the unit continued to see subscriber losses. Sprint said its total count of wireless customers shrank to 52.8 million from 53.6 million at the end of the same quarter a year ago.

"As expected, our wireless business delivered weak financial results," said CEO Dan Hesse, in a press release. "While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues."

Among its Boost mobile customers, the churn rate, or the rate at which customers left the service, ballooned to 9.9% from 7.5% in the fourth quarter. The increase in churn occurred within traditional prepaid users, which Sprint attributed to the elimination of some of its retention efforts and more aggressive prepaid marketing by national carriers.