AT&T Inc. (NYSE: T) managed to show something new in its earnings: growth. The telecom giant was a dog for quite some time, but value investors had been snapping up shares after a recent bottom was put in. It turns out that the quarter was the best revenue growth in more than two years. Also, it was the best first-quarter postpaid net additions in five years.

Earnings came to $0.70 per share versus $0.67 in the year-ago quarter. Excluding significant 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 (versus $32.44 billion estimate). Again, this was the strongest growth in more than two years. More than 2 million new wireless and wireline high-speed broadband connections were added in the first quarter alone.

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For the full 2014 outlook, AT&T raised full-year revenue growth to be 4% or greater. Capital spending is expected to remain in the $21 billion range.

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.

AT&T said that wireless revenues rose by 7% versus 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. As far as a revenue growth driver ahead, AT&T said that it had over 500,000 branded smartphone net adds in both postpaid and prepaid, with nearly 60 million total branded smartphone subscribers.

As AT&T rose yet again to $36.29 today, shares fell by 1.5% on a “sell the news” reaction because this stock had rallied from under $32 as recently as the start of March.

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