An earlier version of this report misstated AT&T’s postpaid net additions. It has been corrected.

A leaner AT&T Inc. topped earnings expectations Wednesday as the company continued to narrow its focus on its core strengths.

The company generated net income of $5.0 billion, or 69 cents a share, in the fourth quarter. A year prior, it logged a net loss of $13.9 billion, or $1.95 a share, after recognizing impairment charges.

On an adjusted basis, AT&T T, +0.53% earned 78 cents a share in its latest quarter, up from 75 cents a year earlier, while analysts tracked by FactSet were expecting 76 cents a share.

Shares were up 1.7% in premarket trading Wednesday.

AT&T’s quarterly revenue declined to $41.0 billion from $45.7 billion, whereas the FactSet consensus was for $40.3 billion in revenue. The drop in revenue reflected AT&T’s third-quarter divestiture of its U.S. video business and its fourth-quarter sale of its Vrio business in Latin America, as well as lower business wireless revenue, the company said in its release.

The company had 1.3 million postpaid net additions in the quarter, including 884,000 postpaid phone net additions. It also picked up 271,000 fiber subscribers and ended the year with 73.8 million HBO and HBO Max subscribers worldwide. These numbers were consistent with metrics that AT&T previously disclosed ahead of an investor conference earlier in January.

AT&T saw postpaid phone churn of 0.85% in the fourth quarter, compared with 0.76% a year prior.

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For the full year, the telecommunications giant expects consolidated revenue growth in the low single digits relative to a 2021 revenue total of $153.2 billion that excludes the U.S. video and Latin America Vrio businesses that AT&T divested. Analysts surveyed by FactSet were predicting $156.3 billion in revenue, which would be up about 2% from the comparable 2021 metric AT&T provided.

AT&T also anticipates adjusted earnings per share of $3.10 to $3.15 for 2022, whereas analysts tracked by FactSet were projecting $3.16 in adjusted EPS. The company expects free-cash flow “in the $23 billion range,” while analysts were modeling $22.5 billion.

AT&T’s report follows one from Verizon Communications Inc. VZ, -0.11% a day earlier. Verizon offered a 2022 earnings outlook that exceeded the consensus view, but its report wasn’t enough to silence questions from some analysts about the future of industry growth.

The report also comes after the Federal Communications Commission recently released results from a key 5G spectrum auction. AT&T will spend $9.1 billion on spectrum it won at the auction, the largest sum of any bidder.

Shares of AT&T have climbed 4.4% over the past three months, as the S&P 500 SPX, -1.22% has lost 4.8%.

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