AT&T Inc. (NYSE: T) did manage to show growth in its first-quarter 2014 earnings, but investors should not at all be surprised about the “sell the news” reaction that has been seen. That remains the case even if you consider that the quarter saw the best revenue growth in more than two years. Also, it was the best first-quarter postpaid net additions in five years.

The set-up may have some caution for Verizon Communications Inc. (NYSE: VZ) ahead of its earnings report.

Earnings came to $0.70 per share, versus $0.67 in the year-ago quarter. Outside of items, earnings grew almost 11% to $0.71 per share, versus $0.64 a year ago. Thomson Reuters was calling for $0.70 per share. First-quarter consolidated revenues rose 3.6% and more than $1 billion to $32.5 billion, just above the $32.44 billion consensus estimate.

Cash from operations was $8.8 billion with $3 billion in free cash flow. During the quarter, the company repurchased 37 million of its shares for $1.2 billion.

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AT&T said that wireless revenues rose 7% from the year-ago quarter, with an operating income margin of 28.3% and EBITDA service margin of 45.4%. Its wireless operating income rose more than 8% to $5.1 billion. More than 2 million new wireless and wireline high-speed broadband connections were added in the first quarter alone. For the telecom giant’s 2014 outlook, AT&T raised full-year revenue growth to be 4% or greater. Capital spending is expected to remain around $21 billion. AT&T ended the quarter with nearly 60 million total branded smartphone subscribers.

As AT&T rose yet again to $36.29 on Tuesday, its stock was down almost 35 at $35.22 on a “sell the news.” As far as why this should have been no surprise at all, keep in mind that the telecom giant’s stock price had rallied almost 15% from under $32 as recently as the start of March. AT&T’s appreciation was strong enough that the yield has fallen to about 5.2% from more than 5.5%.

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Verizon shares were also down 0.8% at $47.55 in mid-day trading on Wednesday, but Verizon’s stock was significantly closer to its 52-week low now. The earnings expectations for Verizon are $0.87 per share earnings on $30.7 billion in revenue. The one caveat for Verizon is that this includes the huge gains from the addition of the rest of the Verizon Wireless stake from Vodafone.

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