AT&T (T) - Get Report posted stronger-than-expected third quarter earnings Monday as it surprised Wall Street with solid postpaid subscriber additions amid a challenge to its business model from activist investors at Elliott Management.

AT&T said adjusted earnings for the three months ending in September came in at 94 cents per share, up 4.4% from the same period last year and one penny ahead of the Street consensus forecast. Group revenues, AT&T said, fell 2.5% to $44.6 billion, missing analysts' forecasts of a $45 billion tally, as it added a much better-than-expected 101,000 new customers to its wireless service that pay a monthly bill.

Looking into the near-term, AT&T said it sees adjusted earnings in 2020 of between $3.60 and $3.70 per share and consolidated revenue growth of between 1% and 2% for the next three years.

Separately, AT&T said that while Randall Stephenson would stay on as CEO through at least 2020, the board will add two new members and the group will sell non-core assets worth around $10 billion as it reacts to pressure for changes outlined last month by Elliott Management.

"The strategic investments we've made over the last several years have given us the essential elements to meet growing demand for content and connectivity," Stephenson said. "Our 3-year plan delivers both substantial and consistent financial improvements over the next 3 years. We grow revenues, EBITDA and EPS every single year, and free cash flow is stable next year, but then grows in both of the next two years, as well. And all of this is inclusive of our investment in HBO Max."

AT&T shares were marked 4.72% higher by mid-day trading Monday to change hands at $38.67 each, a move that would extend the stock's year-to-date gain to around 35.5%.

"We commend AT&T for the positive steps announced today, which will create substantial and enduring shareholder value at one of America's greatest companies," Elliott said in a statement. "We have worked closely and collaboratively with management and the Board on the initiatives announced today. It is clear to us that AT&T is committed to and accountable for creating shareholder value over the near- and long-term."

"We have closely evaluated the company's three-year plan and support the steps toward a faster-growing, more profitable, focused and shareholder-friendly company," Elliott added.

Last month, AT&T was rocked by news that activist investors Elliott Management had built a a $3.2 billion stake in the company and criticized executives for having "yet to articulate" the benefits of its June 2018 acquisition of Time Warner, which added $40 billion to the already-troubling $140 billion in obligations in its balance sheet.

Elliott said AT&T's total shareholder returns (TSR) have lagged the broader S& 500 benchmark by "well over 100 percentage points", and noted its crash out from the Dow Jones Industrial Average in 2015.