What happened

Shares of AT&T (T -0.67%) climbed on Friday after the telecommunications leader delivered surprisingly strong first-quarter results. As of 1:45 p.m. EDT, AT&T's stock price was up nearly 4%. 

So what

AT&T's revenue rose 2.7% year over year to $43.9 billion, besting Wall Street's expectations for revenue of $42.7 billion. Wireless, high-speed internet, and streaming subscriber gains all contributed to the media conglomerate's growth.

"We continued to excel in growing customer relationships in our market focus areas of mobility, fiber, and HBO Max," CEO John Stankey said in a press release.

A person is pointing to an upwardly sloping digital stock chart.

Investors bid up AT&T's shares on Thursday. Image source: Getty Images.

AT&T added 595,000 postpaid phone subscribers, who pay monthly bills and are typically the most profitable and sought-after customers for wireless carriers. AT&T's postpaid phone churn of 0.76% shows that it's also doing a solid job of holding on to its existing customers, despite intense competition from Verizon Communications and T-Mobile US.

AT&T also added 2.7 million domestic HBO Max and HBO subscribers. That brought its total domestic and global customer counts to 44.2 million and 64 million, respectively. Importantly, HBO Max's subscriber gains suggest the new streaming service can compete effectively with the likes of Netflix and Walt Disney.

All told, AT&T's adjusted earnings per share increased 2.4% to $0.86. That, too, was above analysts' estimates for EPS of $0.78. 

Now what 

Management expects AT&T's full-year revenue to inch up about 1% in 2021, while its profits remain close to the $3.18 in adjusted EPS it earned in 2020. 

Additionally, income-focused investors will likely find comfort in AT&T's forecast that its dividend will be well supported by its cash generation. The telecom giant expects to produce roughly $26 billion in free cash flow, which will place its full-year dividend payout ratio at less than 60%.

Even after today's gains, AT&T's shares currently yield a sizable 6.6%.