Sprint (S) posted another loss as wireless subscribers continue to flee. Sprint lost $505 million, or 18 cents a share, for the first quarter ended March 31, compared with a year-ago loss of $211 million, or 7 cents a share. Revenue dropped 8% from a year ago to $9.33 billion. Sprint’s adjusted profit, which removes the effects of special items such as job-cut costs and merger-related amortization expense, slid to 4 cents a share from 18 cents a year ago.

“As expected, our Wireless business delivered weak financial results,” CEO Dan Hesse said. “While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues.”

Sprint said it lost 1.09 million wireless users in the latest quarter, which is a bit better than the company’s forecast for a loss of 1.2 million users. Still, wireless revenue dropped 9% from a year ago and 6% from fourth-quarter levels, while average revenue per user dropped as a result of “customer migrations to lower-priced plans, a higher-than-average [average revenue per user, or ARPU] in deactivating subscribers, and increased customer concessions to improve retention,” Sprint said.

Sprint said it has completed its latest round of job cuts, but suggests there could be more to come later this year. “In light of the trend of our declining earnings before interest, taxes, depreciation and amortization, we are continuing to implement cost reduction initiatives, are exploring de-levering, disposition of non-core assets and other measures” to stay in compliance with lenders’ terms, Sprint said. The company says it continues to assess its business model and financial outlook and will update investors in August.

Sprint (S) is admitting defeat in its 2005 merger with Nextel. The struggling telco posted a fourth-quarter loss of $29.5 billion, or $10.36 a share, reversing the year-ago profit of $261 million, or 9 cents a share. The latest quarter was hit by a $29.7 billion writedown of merger-related goodwill, reflecting the difference between the price Sprint paid and the actual value of the assests purchased. Excluding that gargantuan charge, Sprint made 21 cents a share on an adjusted basis, beating the 18-cent analyst consensus estimate. Revenue fell 6% from a year ago to $9.8 billion, missing the $9.95 billion Wall Street target.

“The fourth quarter financial results reflect the challenges facing our wireless business,” said CEO Dan Hesse, who took over late last year for Gary Forsee. Adjusted operating income at the wireless business plunged to $168 million from $652 million a year earlier, as Sprint continued to lose customers, pressuring service revenue. Fortune’s Michal Lev-Ram and Scott Moritz reported Wednesday that Sprint is having more and more trouble holding onto lucrative wireless postpaid users. In the fourth quarter, the company said, total post-paid subscribers declined by 683,000.

In response, Hesse said Sprint is taking steps to bolster its financial flexibility, by saying it won’t declare any dividends in the forseeable future and letting its $6 billion stock buyback plan expire. But the business is in such disarray that he’s taking his time to consider what needs to be done. “Internally, we have rolled out a unified company culture focused on accountability and on providing a superior customer experience,” he said Thursday. “We plan to share some of our initiatives for improving the customer experience and operations next quarter.” But, he cautions, “Strategic assessments and changes may take longer to complete.”

Clearwire (CLWR) surged Tuesday on reports that the wireless company’s partnership with Sprint Nextel (S) may be resurrected. The Wall Street Journal reported that Sprint has resumed talking with Clearwire about a deal that would bring in outside players such as Intel (INTC) to fund a high-speed network using WiMax technology. The reversal comes just two months after Sprint backed away from an earlier plan to team up with Clearwire on a WiMax project. As Fortune’s Stephanie Mehta pointed out two months ago, the technology has been heavily hyped but so far little deployed. Yet given Sprint’s desperate straits — the company has been losing postpaid wireless subscribers at an alarming clip, and new chief Dan Hesse is expected to roll out another round of layoffs next month — reviving the Clearwire deal makes sense. Sprint, after all, would get help building a service that could help it compete with rivals AT&T (T) and Verizon (VZ) — while buying Hesse time to fix the free-falling cell phone service business. As for Clearwire, it continues to combine the promise of a new wireless technology with the economics of a classic dot-com — so don’t be surprised if Tuesday’s rally fades in coming days.

The news keeps getting worse at Sprint (S). The struggling wireless telco suffered its worst quarter yet for customer defections, saying a staggering 683,000 post-paid users headed for the door in the fourth quarter. Sprint’s churn, reflecting the rate of monthly subscriber loss, rose to 2.3 percent, which is more than double the rates recently posted at the fastest-growing big carrier, Verizon Wireless.

Worse yet, Sprint expects these trends to get even worse, which is why it’s firing 4,000 workers and closing 125 stores. Sprint last year set plans to cut 5,000 jobs as then-CEO Gary Forsee pledged to get Sprint’s user numbers moving in the right direction again. But he failed, leading to his departure last year. The management change aside, Sprint’s health has turned so ill that the company is now threatening Wall Street with a big writedown of the goodwill taken on in its acquisition of Nextel a few years back - in effect, a belated recognition that the company badly overpaid in the $35 billion deal. No wonder Sprint shares are poised to set another five-year low when trading opens Friday.