Even so, Sprint Nextels condition has been so poor that investors were able to seize on news that wasnt as bad as usual. Sprints adjusted loss beat Wall Street expectations, and the company predicted fewer customer losses in the coming year. That sent Sprint shares soaring 50 cents, or 18 percent, to $3.21 in afternoon trading.

During a conference call with analysts, Chief Executive Officer Dan Hesse said he still wasnt happy with his companys performance but said he believed Sprints efforts to rebuild the companys image were gaining traction.

“The improvements we have made with the customer experience are the foundation for driving further improvement in the perception of our brand,” Hesse said, pointing out that Sprint lost slightly fewer customers during the fourth quarter than in the third quarter.

Analysts were lukewarm to the results, saying they still showed a company struggling for a place in a market increasingly dominated by Verizon Wireless and AT&T Inc.

“While we believe the stocks rally today is largely because the quarter did not appear to be a complete disaster, we see very little in the fourth quarter results to be positive about,” Stifel Nicolaus analyst Christopher King said in a research note.

Rick Franklin, an analyst for Edward Jones, said Sprint Nextel continues to generate sufficient cash to pay its debt obligations for the next two years. But he said Sprint must show it can consistently grow its business to get the financing it needs beyond that.

“We think Sprint has value. If current management cant extract that value by reversing subscriber losses, an external buyer may look at the company for its wireless spectrum holdings and current subscriber base,” Franklin said. “Even declining subscribers have value.”

The Overland Park, Kan.-based company said it lost $1.6 billion, or 57 cents per share, during the three months ending Dec. 31. By comparison, Sprint lost $29.3 billion, or $10.31 per share, during the same period a year ago. That figure included a $29 billion write-down of the value of its 2005 purchase of Nextel.

Sprint said it wrote down the remaining $1 billion in Nextels value during the fourth quarter. Not including the write-down and other one-time charges, the company said it would have lost a penny per share, better than the 3-cent-a-share loss expected, on average, by analysts surveyed by Thomson Reuters.

Revenue fell 14 percent to $8.4 billion, missing analysts expectation of $8.55 billion.

Sprint said it lost 1.27 million customers during the quarter, including 1.1 million “postpaid” customers who are on contracts and are considered the most valuable subscribers. The numbers were a slight improvement from the third quarter, when Sprint lost 1.32 million customers, including 1.12 million people on contracts.

The subscriber losses took Sprint to 49.3 million, an 8.4 percent decline from the end of 2007. Churn, or the measure of subscriber turnover, was 2.16 percent, down from 2.29 percent a year ago and about even with the 2.15 percent in the third quarter.

Revenue from Sprints remaining wireline business, which is dominated by Internet service lines, declined 6 percent to $1.5 billion.

For all of 2008, the company said it lost $2.8 billion, or 98 cents per share, compared with a loss of $29.4 billion, or $10.27 per share, during 2007. Annual revenue fell 11.2 percent to $35.6 billion.

Looking ahead to the rest of the year, Sprint said it expected subscriber losses to be fewer than the 4.6 million customers who fled in 2008.

Sprint has struggled with operational and technical problems since purchasing Nextel for $35 billion in 2005.

In the past year, the company has focused on improving customer service – seen as one of its biggest shortcomings. Sprint also has an exclusive deal to soon sell Palm Inc.s new Pre smart phone, which early reviewers say could be the first serious competitor to Apple Inc.s iPhone, sold through AT&T in the U.S.

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