AT&T's earnings missed by a penny but revenue rose faster than expected in the fourth quarter as it added more subscribers due to strong sales of smartphones like Apple's iPhone, sending its shares up 1 percent in after-hours trading.
The No. 2 U.S. mobile service provider said on Thursday that it added 780,000 subscribers in the quarter compared with the average expectation for 699,200 from 10 analysts. Most estimates were 700,000 or higher but the lowest was 475,000.
AT&T forecast earnings and revenue growth for the full year 2013 but said it is expecting little improvement in the economy.
While the company's sale of 8.6 million iPhones in the quarter helped AT&T's subscriber numbers it hurt its profit because AT&T pays Apple a big subsidy for every iPhone it sells so it can offer a discount to customers who commit to contracts.
AT&T's wireless service profit margin based on earnings before interest, tax, depreciation and amortization was 29.1 percent, compared with the average expectation for 31.29 percent from ten analysts contacted by Reuters.
The company forecast earnings per share growth in the upper-single digit percentage range or higher and revenue growth exceeding 2 percent for 2013 based on strength in wireless and its wireline consumer business.