AT&T Inc survived the loss of its exclusive U.S. rights to sell the Apple Inc iPhone.
The No. 2 U.S. mobile service, which is planning to buy T-Mobile USA, managed to eke out a slight increase in subscribers in the first quarter, surprising Wall Street and sending its shares up almost 1 percent.
Its addition of 62,000 net contract customers in the quarter was much weaker than its fourth quarter growth of 400,000 but better than the average expectation for a loss of 83,000 customers from seven analysts polled by Reuters.
The decline reflected the February launch of iPhone at Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.
The company also attributed some defections to network technologies changes for some customers resulting from its acquisition of Alltel assets and Centennial.
But Wall Street analysts were impressed that it managed to keep customer defections lower than expected.
It doesn't look like (Verizon Wireless) decimated AT&T as many people thought they might, said Piper Jaffray analyst Christopher Larsen.
AT&T earnings rose to $3.4 billion, or 57 cents a share, matching the average Wall Street estimate, according to Thomson Reuters I/B/E/S. A year earlier it posted a profit of $2.5 billion, or 41 cents per share.
Revenue rose 2.3 percent to $31.25 billion compared with analyst expectations for $31.26 billion, according to Thomson Reuters I/B/E/S.
AT&T shares were rose to $30.53 in premarket trading after closing at $30.31 in the regular New York Stock Exchange session.
Its results came the day before the scheduled report of Verizon Communications, which owns Verizon Wireless along with Vodafone Group Plc. The Verizon Wireless iPhone hit stores Feb 10.
(Reporting by Sinead Carew; editing by Derek Caney)