Nextel Communications

(NXTL)

, one of six nationwide wireless carriers in the U.S., beat Wall Street's earnings expectations Friday but cautioned that heavy expenses in the first half of this year will eat into its results for the first quarter.

Shares of Nextel dove on the warning, falling $4, or 14%, to $25.50 amid a Friday morning

Nasdaq

selloff.

For the fourth quarter ended Dec. 31, Nextel, which is 16%-owned by the family of billionaire telecommunications pioneer Craig McCaw, reported a loss of 34 cents a share before extraordinary items. The consensus estimate of analysts polled by

First Call/Thomson Financial

was a loss of 36 cents.

Including extraordinary items, the company reported a net loss of $61 million, or 8 cents a diluted share, narrower than a loss of $369 million, or 42 cents a share a year earlier.

TST Recommends

Operating revenue rose 51% to $1.65 billion from $1.09 billion a year ago.

As is often the case, the solid fourth-quarter numbers appear likely to be overshadowed in Friday trading by the company's disappointing forecast.

During the quarter, the company announced net new subscribers in the U.S. of 521,200, exceeding expectations of 510,000 to 515,000. ARPU, or the amount of revenue generated annually by each customer, came in at $73, the highest of all the national wireless carriers.

Consolidated EBITDA rose 79% to $387 million from $216 million a year ago, also in line with estimates.

But capital expenditures for the fourth quarter and fiscal 2000 came in higher than expected, with domestic capex at $963 million for the quarter and $2.98 billion for the year.

On top of that, "guidance was lower than some investors were looking for," wrote analyst Frank Marsala of

ING Barings

in a note about the numbers. He rates Nextel a strong buy and his firm has done no underwriting for the company.

The Reston, Va.-based company also said that operating expenses will be "significantly greater" in the early part of fiscal 2001. Consequently, domestic operating cash flow in the first quarter "may not exceed" that of fourth quarter 2000, when that metric increased 67% from the year before to $418 million.

Nextel also expects domestic revenue growth of 25% to 30%, exceeding $7 billion, as well as cash flow growth of 50% to 65%, both for full-year 2001.

Both projections are lower than Marsala's expectations of 38% revenue growth and 76% cash flow growth.