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Another strong quarter for AT&T as revenue, profits climb

Carrier generates $3.6 billion in profit, with smartphones playing a key role. By quarter's end, 59.3 percent of its wireless subscribers were using smartphones, up from 46.2 percent a year ago.

AT&T marked a strong first quarter with smartphones leading the way, the company announced today.

During the three-month period ended March 31, AT&T generated $31.8 billion in revenue, representing a gain of $575 million, or 1.8 percent, compared to the first quarter of 2011. In addition, AT&T posted a profit of $3.6 billion, or 60 cents per share, in the period, up from the $3.4 billion it generated in the first quarter of 2011. Analysts were predicting 57 cents per share for the latest quarter.

A key revenue driver for the company was smartphone sales, which hit their highest first-quarter point ever. According to AT&T, it sold 5.5 million smartphones last quarter, and those advanced devices accounted for 78 percent of all postpaid device sales. By the end of the quarter, 59.3 percent of AT&T's wireless subscribers were on smartphones, up from 46.2 percent last year. AT&T activated 4.3 million iPhones during the period.

It was more good news on the subscriber front, with net additions of 726,000 wireless customers during the period. With those additions, AT&T's total wireless subscriber count has reached 103.9 million. Net additions for so-called "branded computing," or those who have signed up for AT&T service via tablets or tethering plans among other options, hit 460,000 during the period -- totaling 5.8 million.

"We continue to capitalize on our terrific momentum in mobile Internet," AT&T CEO Randall Stephenson said today in a statement. "Smartphone and branded computing device sales continue to set a record pace, mobile data revenues were up nearly 20 percent, and we achieved this growth with expanding margins. These results add confidence in our outlook for the year."

AT&T's strong first-quarter performance stands in stark contrast to the fourth quarter of 2011 when the company took a massive loss of $6.7 billion. Although that would seem to indicate trouble, much of that loss was due to how the company was required to account for employee pension benefits, as well as the breakup fee it had to pay after ditching plans to acquire T-Mobile USA. If not for those two elements, the quarter would have looked quite good for the company as revenue and subscriber figures grew during the period.

Interestingly, AT&T revealed today that one of the more controversial decisions it made back in 2010 -- a switch to tiered data plans -- isn't necessarily upsetting customers. In fact, 61 percent of its smartphone subscribers at the end of the quarter were on a tiered-data offering. In the first quarter of 2011, 38 percent of its smartphone subscribers had decided to pay for such plans.

This story has been updated throughout the morning with new details.