AT&T Inc on Wednesday reported quarterly profit that beat Wall Street estimates by a penny and lower-than-expected revenue that was nearly flat from a year ago.

The second-largest U.S. wireless carrier posted net income of $3.2 billion, or 61 cents per share, in the first quarter ended March 31, compared with $3.65 billion, or 70 cents per share, in the year-ago quarter.

Excluding items, AT&T earned 63 cents per share, ahead of analysts' average estimate of 62 cents per share, according to Thomson Reuters I/B/E/S.

Revenue was $32.58 billion compared to $32.48 billion a year earlier. Analysts expected revenue of $32.84 billion.

The company said postpaid churn, or the rate of customer defections, fell slightly to 1.02 percent from 1.07 percent a year ago.

Shares of AT&T were up 1.9 percent in after-hours trading. They closed at $32.86 on the New York Stock Exchange.

AT&T said it had added 441,000 postpaid or contract subscribers and 1.2 million new wireless customers in the quarter.

The average revenue per contract phone user, fell 9.6 percent from a year earlier.