Previous to earnings, longtime carrier bear Craig Moffett of Bernstein Research calculated Verizon's third-quarter profit margins could fall by 270 basis points as a result of the iPhone 5, and he projected bigger declines at AT&T. Moffett's negative outlook was also matched by other analysts on Wall Street.

Stifel Nicolaus analyst Christopher King cut his buy ratings on AT&T and Verizon as a result of iPhone 5 shipments in the quarter, noting " We believe potential downside to earnings estimates exist as we enter into the back half of the year." King estimated Verizon's wireless service margins could fall by 5.3% through year end. Earnings show they continue to rise.

In the wake of Verizon's earnings, Bernstein's Moffett suspended his thesis that Verizon's earnings momentum would tip negative on the iPhone 5 launch.

"The test we all knew about was wireless margins. Even solid growth (which brings commensurately high customer acquisition cost) and a new iPhone (available for a single week in Q3) couldn't derail the Verizon Wireless margin juggernaut," wrote Moffett, in a note to clients. The analyst highlighted softer wireline revenue - the company still gets nearly 50% of revenue from cord-attached phones -- as a reason overall earnings estimates met expectations, in spite of Verizon Wireless's clear beat.

It isn't the first time in October Moffett's had to step back from his negative outlook on the telecom sector. In March, he began handicapping Sprint's ( S) eventual bankruptcy, but readily available debt financing and the company's sale to Softbank of Japan forced the analyst to suspend odds making on the carrier's demise.

Investors and Verizon's management cheered the record wireless results.

"Verizon Wireless continues to do an outstanding job of balancing growth and profitability," said Verizon CEO Lowell McAdam, in a statement. "Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years." McAdam also said that the company's on track to meet its 2012 forecasts.

Verizon shares rose 2.37% to $45.78 in Thursday trading, while AT&T rose nearly 1% to $36.02. Both carriers' shares have risen in excess of 10% year-to-date, excluding dividends, beating broader index returns.

For now, telecom investors can breathe a sigh of relief on the impact of the iPhone 5 on carrier profit margins.

The bigger question for investors and analysts to answer is whether earnings reflected Apple's issues in maintaining iPhone 5 supplies, or if they signal the math behind iPhone subsidy bearishness simply doesn't add up. Watch for analysts to redo calculations on the interplay between subsidies, subscriber adds and overall wireless profit margins in the days ahead.

Meanwhile, the implications of a telecom sector reshuffle on Sprint's takeover and T-Mobile's merger with MetroPCS ( PCS) on Verizon and AT&T's earnings outlook are yet to be fully understood, and may yet turn wireless earnings and pricing momentum negative .

For more on the impact of the iPhone 5 on corporate earnings, see whether iPhone 5 sales can buy some time. See why AT&T is still hungry for more spectrum and how a tower deal twists consolidation for more on the wireless industry.

-- Written by Antoine Gara in New York

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