AT&T Hits Profit Target, but Revenue Light

"Telco broadband -- while very soft at just 46,000 net additions, well below sell-side consensus -- was ... perhaps better than the bears had whispered, where a negative number had become the expectation," Moffett said.

Elsewhere, AT&T's U-verse service saw strong growth in the quarter, as well. Net subscriber additions totaled 170,000, up sharply from a year ago and nearly 15% sequentially. Those customer additions pushed AT&T's total U-verse subscriber count to 549,000 at the end of the quarter.

Shares of AT&T were up 4.1% to $33.11 Wednesday, although the stock is still lower by nearly 18% for the year. Telco peer Verizon (VZ Quote), which reports results Monday, was adding 3.2% at $35.79. Sprint Nextel (S Quote) was gaining 0.7% to $8.48.