Sprint Nextel Corp. (S) surged almost 12% after reporting a first-quarter profit, excluding items, despite a drop in revenue.

The telecom giant’s adjusted EPS came in at 3 cents per share, while analysts saw a loss of 4 cents. Revenue came in at $8.2 billion, a 12% decrease from last year’s $9.3 billion.

During the quarter, Sprint lost a net 1.25 million postpaid customers. However, it added 764,000 net new Boost prepaid customers. The company indicated that growth was mainly driven by a new $50 unlimited service plan, which was launched by the Boost unit.

The company expects postpaid as well as prepaid subscriber losses to improve this year, in contrast to the 2008 levels. It indicated that postpaid numbers during the second quarter would be boosted by Palm’s (PALM) Pre phone, although it did not specify its launch date.

Out of a total of 23 covering analysts, 4 have lowered expectations while 4 have raised expectations over the past month, bringing the consensus to a loss of 21 cents per share, narrower by a penny.

Sprint, which is a Zacks #3 Rank (”Hold”) company, is currently moving on unusually high volume of more than 63 million shares, against the daily average of about 27 million.

“S” Free Stock Analysis: Buy? Sell? Hold?
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