Carrier misses expectations

AT&T; Inc.’s earnings rose 5.5% in the third quarter but missed analyst expectations because of strong sales of Apple Inc.’s iPhones, which the carrier subsidizes.

The company said it earned $3.23 billion, or 55 cents a share, in the July-September period, up from $3.06 billion, or 50 cents, a year earlier.

Excluding $1.1 billion in merger-related costs, the Dallas-based company earned 67 cents a share. Analysts polled by Thomson Reuters were expecting 71 cents.

AT&T;’s profit took a hit of $900 million, or 10 cents a share, in subsidies for the 2.4 million iPhones it sold, and 2 cents a share in hurricane damage.

Revenue rose 4% to $31.3 billion, matching analysts’ estimates.

AT&T; shares fell $1.95, or 7.6%, to close at $23.78.