Updated from 7:22 a.m. EDT

Nextel ( NXTL) keeps pushing the right buttons with Wall Street.

The fast-growing cellphone service posted first-quarter earnings Thursday morning that wiped out analyst estimates. The strong report marks the third consecutive knockout report in the surging wireless sector, on the heels of blowout numbers this week from Motorola ( MOT) and Qualcomm ( QCOM).

For its first quarter ended March 31, Nextel posted a profit of $591 million, or 53 cents a share. That's up from the year-ago $208 million, or 20 cents a share. Revenue jumped 31% from a year earlier to $3.1 billion.

Analysts surveyed by Thomson First Call had forecast a first-quarter profit of 44 cents a share on revenue of $2.98 billion.

"Wireless services continue to lead the growth in the telecommunications industry with Nextel contributing more than its fair share to those results with 30% plus year-over-year growth in revenue and OIBDA, and triple digit year-over-year growth in income, EPS and free cash flow," said CEO Tim Donahue. "Nextel is investing to expand our coverage, appeal to new high-value segments through our NASCAR partnership and the Boost Mobile brand, and to introduce new services such as International Direct Connect. First-quarter trends give us confidence that these investments will build upon our momentum in the coming quarters."

Nextel added 474,000 subscribers, flat with the year-ago addition. Average monthly revenue per subscriber, or ARPU, rose $2 from a year ago to $69. Monthly customer departures, or churn, slid to 1.7% from last year's 1.9%.

Nextel also boosted its 2004 subscriber-growth guidance to 1.9 million users from the 1.8 million figure it forecast in January, and said free cash flow for the year would hit $1.7 billion, up from the $1.6 billion January forecast.

Watchers of the wireless sector always keep an eye on subscriber-growth figures. Nextel has been among the fastest-growing wireless telcos by virtue of its push-to-talk walkie-talkie feature. But analysts are taking the company's pulse with a bit more anxiety lately now that big rivals like Verizon Wireless have rolled out their own competing service.

Nextel disappointed its fans in January by warning that 2004's subscriber growth wouldn't match 2003 levels. The company added 2.3 million subscribers last year and said it would add just 1.8 million in 2003, though some fans said they thought the company was being conservative in its forecasting.

Nextel bulls, and there are many of them, have long noted the company's industry-leading customer loyalty and per-customer yield numbers. The Reston, Va., tech shop's stock has risen some 500% in the last two years, but it has been flat throughout 2004 as the industry undergoes a sorting-out period.

The news comes as Nextel pushes toward a controversial plan to swap radio spectrum with the government. The Federal Communications Commission has three of the five votes necessary to approve a plan that would give Nextel a new swath of radio frequency, the Washington Post reported last week.

The radio spectrum swap, in which Nextel would vacate airwaves used by emergency services in exhange for some high-priced real estate elsewhere, could set the telco up for a billion-dollar-plus windfall. Better yet, it could give the company some valuable airwave real estate and rid it of the mixed-up scraps of spectrum it's long been stuck with.

Shares were recently up 43 cents, or 1.7%, to $25.23.

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