AT&T posted a profit of $3.2 billion, or 54 cents per share compared with $3.77 billion, or 63 cents per share in the same quarter a year ago.
Revenue fell to $30.73 billion from $30.87 billion and compared with the average analyst expectation for $30.64 billion, according to Reuters Estimates.
AT&T added 1.4 million net subscribers in the quarter including 1.2 million retail monthly bill-paying customers. Analysts on average had expected 1.08 million subscribers according to six analysts contacted by Reuters.
The company had more than 2.4 million iPhone activations in the quarter. More than a third of these customers were new to AT&T.
Its shares were up 4 percent to $25.85 in premarket trading.
(Reporting by Sinead Carew; Editing by Derek Caney)