AT&T results top estimates with iPhone help

AT&T Inc reported stronger-than-expected third quarter profit as the wildly popular iPhone helped it land a record number of new wireless customers for the period, sending its shares up 3.7 percent.

Some investors have worried about AT&T's increasing dependency on Apple Inc's (AAPL.O) iPhone for growth, but at least for now the phone is paying big dividends.

AT&T, which has exclusive U.S. rights to the phone, said it was boosted by 3.2 million iPhone activations in the quarter, with nearly 40 percent of those new to AT&T.

This helped it report 2 million net customer additions, including 1.4 million valuable monthly-bill paying customers. The average forecast from five analysts contacted by Reuters was for 1.5 million net additions.

The company, which faces home phone disconnections, is also depending on services such as high-speed internet and its U-Verse television service for growth. It added 240,000 U-Verse customers, bringing its total to 1.8 million.

AT&T reported third quarter earnings of $3.2 billion, or 54 cents a share, compared with profit of $3.2 billion, or 55 cents a share, in the period a year ago. Analysts had expected it to post earnings of 50 cents a share.

Revenue fell 1.6 percent to $30.9 billion, the company said, which was in line with the average analyst estimates of analysts polled by Thomson Reuters I/B/E/S.