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AT&T (NYSE:T) is the worst performer on the Dow Jones Industrial Average (DJINDICES:^DJI) today. The telecom reported third-quarter results last night, and AT&T shares plunged as much as 2.9% overnight on the news.

The report itself wasn't terrible. In fact, it was outright good news. AT&T reported total sales of $32.2 billion, a 2.2% year-over-year increase that was within a rounding error of meeting analyst targets. On the bottom line, $0.66 of adjusted earnings per share came in a penny above Wall Street estimates. That's a 6.5% annual growth rate -- stronger than the top-line jump, thanks to a generous share-buyback program.

And yet, AT&T's stock has faltered. What's going on here?

Losing ground to Verizon
AT&T saw just 363,000 new wireless contract subscribers this quarter. That's more than double the year-ago period's additions but weak compared to Verizon (NYSE:VZ), which recently reported 927,000 new subscribers for the same period.

In other words, Verizon is wiping the floor with AT&T when it comes to attracting new customers. That's never a good sign for what's coming in future quarters.

What's next?
Losing the subscriber race to Verizon in one quarter is hardly the end of the world. AT&T still boasts 109 million wireless customers, including 72 million of the high-margin postpaid variety. Moreover, AT&T sold smartphones to 1.2 million new subscribers this quarter. The company is losing a ton of accounts on voice-only contracts. That's not a bad trade-off, given the much fatter margins of smartphone-class data plans.

In the end, I don't expect this minor discount on AT&T shares to stick very hard. Come back next week, and you'll find it difficult to discern any lasting effects on AT&T stock prices from this hiccup.

The long-term story is still the same: AT&T battles Verizon for American wireless supremacy, while lesser lights regroup around the feet of these two giants. The Verizon-AT&T duopoly may gain some serious competition in 2014 as this year's consolidating telecom buyouts start bearing real fruit, but the third quarter showed no signs of harmful ankle-biting.

Fool contributor Anders Bylund has no position in any stocks mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+.

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