Sprint Nextel Corp posted better-than-expected results on cost cuts even as more postpaid customers defected to rival services than Wall Street had expected and business customers canceled services due to the recession.

Sprint's net loss swelled to $594 million, or 21 cents per share from a loss of $505 million, or 18 cents per share in the same quarter a year ago.

But excluding unusual items, Reuters Estimates said that it would have posted a profit of 3 cents a share compared with average analyst estimates for a loss of 4 cents a share.

The No. 3 U.S. mobile service said revenue fell 12 percent to $8.21 billion from $9.33 billion. Analysts on average were expecting revenue of $8.288 billion, according to Reuters Estimates.

The company posted a net loss of 1.25 million postpaid customers, who pay monthly bills and sign up for long-term contracts. This compares with the average expectation for a loss of 1.1 million customers from 8 analysts contacted by Reuters.

Its shares rose 8 percent to $5.05 in premarket trade.

(Reporting by Sinead Carew)