Updated from 8:37 a.m. EST

With demand strong for its digital cell phone service,

Nextel Communications

(NXTL)

reported a smaller-than-expected loss for its fourth quarter Tuesday and a 65% rise in revenues.

The wireless-telecommunications company also announced a 2-for-1 stock split.

Nextel's shares surged on the news, gaining or 8 5/16, or 7%, to 127 in early trading Tuesday.

Nextel, based in Reston, Va., posted a loss of $251 million, or 85 cents a share, excluding a one-time charge for early payment of debt. Analysts surveyed by

First Call/Thomson Financial

had been expecting a loss of 97 cents a share.

Including the charge, Nextel posted a net loss of $369 million, or $1.04 a share, in the latest quarter, compared with a loss of $413 million, or $413 million, or $1.43 a share, in the fourth quarter of 1998.

During the quarter, Nextel added 549,100 new digital subscribers and brought in $980 million in total revenues, up from $592 million in the comparable quarter in 1998.

"In 2000, Nextel will pursue several strategic initiatives including aggressively growing our domestic and global wireless operations, launching our Nextel Worldwide GSM/iDEN roaming services, and introducing innovative wireless Internet products and services,'' said Tim Donahue, Nextel president and chief executive officer.

New shares from the split will be doled out to shareholders on June 6, upon shareholder consideration and the company's board approval at the annual shareholders meeting scheduled for May 25.