Verizon Communications Inc. (NYSE:VZ) on Tuesday unveiled better-than-expected third-quarter net income of $4.04 billion. In part this was due to smartphone subscribers hopping on equipment installment plans, which replaced two-year contracts.

Verizon posted total earnings of $4.17 billion on $33.1 billion in revenue, edging past analyst estimates of $4.14 billion on $32.9 billion in revenue. Adjusted earnings per share came in at $1.04, up 16.9 percent from 89 cents in the same period last year.

“Verizon continues to grow earnings by delivering network reliability and superior value that continues to attract new customers,” said Verizon Chairman and CEO Lowell McAdam in a press statement. “Verizon Wireless posted another quarter of quality connections growth -- even better than in the second quarter -- while maintaining high customer loyalty and profitability.”

On the wireless side of its business, Verizon saw gains of 1.3 million postpaid subscribers in the quarter, slightly exceeding analyst expectations of 1.2 million, bringing its total postpaid subscriber base to 105 million users, according to the Wall Street Journal. At the same time it added 889,000 4G LTE smartphones to its subscriber base, up 35 percent from last year. However, its total subscriber growth was down 13 percent compared with last year’s growth of 1.5 million users.

Despite the slight slowdown in subscriber growth, Verizon saw wireless equipment revenue increase 73.1 percent to $4.3 billion compared with $2.5 billion in the same period last year, in part due to its shift away from two-year contracts to installment plans, which allow the carrier to report higher device revenue.

Verizon’s FiOS business also saw positive numbers, including an addition of 114,000 FiOS Internet subscribers and 42,000 FiOS video subscribers. But its consumer Internet revenue overall only marginally increased to $4 billion, a 2.8 percent gain over last year.

For future growth, Verizon is looking toward other areas of revenue including AOL, which it acquired in June for $4.4 billion, and Go90, a social television and video app it launched in September. The company expects to add more content, app features and places to advertise within the app as it develops. Over the first nine months in 2015, Verizon also invested $22 billion in wireless spectrum licenses for future network capacity.

Verizon shares were up slightly in premarket trading Tuesday.