UPDATE 1-AT&T quarterly revenue beats analysts' estimates
NEW YORK, July 23 (Reuters) - AT&T Inc posted quarterly revenue on Tuesday that was ahead of Wall Street expectations as it added wireless subscribers but its profitability was hit by higher costs.
AT&T, the No. 2 U.S mobile service provider, said it added more than 550,000 contract customers in the quarter, slightly ahead of its target for about 500,000 and an improvement from its 320,000 net additions in the year-ago quarter.
Its growth rate, however, was still well behind 941,000 net additions at bigger rival Verizon Wireless , which reported its financial results on July 18.
It posted earnings of $3.82 billion, or 71 cents per share, compared with $3.97 billion, or 66 cents per share in the year-ago quarter.
Its wireless profit margin based on earnings before interest, tax, depreciation and amortization (EBITDA) was 42.4 percent in the quarter compared with 45.8 percent in the second quarter of 2012 due to higher costs.
Revenue rose to $32.08 billion from $31.58 billion, compared with Wall Street expectations for $31.81 billion, according to Thomson Reuters I/B/E/S.