AT&T Inc. posted fourth-quarter earnings that topped analysts’ expectations, giving investors less reason to fret over lavish free-phone promotions and the mounting costs of 5G and fiber network expansion.

Fourth-quarter earnings excluding some items were 78 cents a share, compared with the 75-cent average estimate of analysts surveyed by Bloomberg.

The company said 2022 adjusted earnings will be $3.10 to $3.15 a share on a low-single-digit revenue increase. Analysts had projected earnings would be $3.13 a share on sales of $155.2 billion.

The third-largest U.S. wireless carrier didn’t provide a specific outlook for its wireless business. AT&T had already announced that it added 4.5 million wireless customers in 2021, the fastest growth in 10 years, thanks in part to iPhone giveaways.

See Demi Moore and Mila Kunis in AT&T's new fiber speed campaign

Chief Financial Officer Pascal Desroches said on the earnings call that the company feels good about the trajectory of the wireless business and sees mobile “normalizing” lower after 2021’s boom.

Colby Synesael, an analyst with Cowen, expects an industry slowdown of about 17% for new phone subscribers in 2022.

AT&T now expects to close the WarnerMedia merger with Discovery Inc. in the second quarter, slightly ahead of the previous “midyear” estimate.

AT&T credited fourth-quarter revenue growth to gains in broadband that more than offset declines in landline phone and DSL services. Earlier this week, the company introduced the fastest and most expensive fiber connections offered by major internet providers, topping out at a blazing 5 gigabits per second for $180 a month.

AT&T shares fell 1% at 9:58 a.m. in New York, erasing a premarket gain. As of Tuesday, the stock had fallen 9% over the past 12 months, compared with a 9.5% drop in Verizon and a 19% slump in T-Mobile US Inc.

Verizon shares also slipped Wednesday after the stock was downgraded by JPMorgan amid increasing concerns over the outlook for growth this year in wireless.

Subscribe to Ad Age now for award-winning news and insight.

—Bloomberg News