AT&T may not have the exclusive rights on the iPhone anymore, but the company still managed to turn in strong earnings buoyed by revenue growth in wireless as well as strong wireless subscriber growth.

Profits for the telecommunications company were up a robust 39 percent for the first quarter. The company reported today that its earnings for the quarter, which ended March 31, were $3.41 billion, or 57 cents a share, up from $2.45 billion, or 41 cents, a year earlier. Excluding costs related to a tax issue, the year-ago profit was 58 cents. Revenue rose 2.3 percent to $31.25 billion.

Analysts had expected AT&T to report profits of 57 cents on revenue of $31.26 billion, according to Thomson Reuters.

Despite losing its exclusive rights to sell the Apple iPhone in U.S., AT&T still managed to add 2 million new wireless subscribers during the quarter. This was up from 1.9 million new customers added during the same quarter last year. AT&T now has a subscriber base of 97.5 million, which is 12 percent higher than last year's level.

Some experts had speculated that AT&T may not grow its wireless business as quickly after Verizon Wireless began selling the iPhone in February. But AT&T actually saw its best-ever first quarter for smartphone sales. The company sold more than 5.5 million units. This was an increase of 60 percent compared to the same quarter a year ago, the company said. During the quarter, AT&T activated 3.6 million iPhones.

AT&T also said that about 65 percent of its postpaid, or contract, sales in wireless were related to smartphones. And at the end of the quarter, the company said that 46.2 percent of its 68.1 million postpaid subscribers had smartphones, up from 34.7 percent a year earlier. This is important for the company because smartphone subscribers tend to spend more money. AT&T says that smartphone customers spend 1.8 times more than customers on regular phones.

As a result, the average monthly revenue per subscriber increased 2.4 percent from the year-earlier quarter to $63.39. This marked the ninth consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU, the company said.

Last month, AT&T surprised the market by announcing it plans to spend $39 billion to acquire T-Mobile from Deutsche Telekom. The deal is expected to be scrutinized by regulators, but AT&T's CEO is confident it will go through. And he said that the addition of T-Mobile will make the company even stronger.

"Mobile broadband networks are driving unprecedented growth and innovation, and AT&T is playing a leading role in bringing these benefits to customers," Randall Stephenson, AT&T chairman and chief executive officer said in a statement. "That's why our agreement to acquire T-Mobile USA, which we announced in March, is so important. Combined, the two companies' spectrum and network assets will allow us to simultaneously address spectrum issues created by this increased demand and improve customers' network experience as volumes continue to grow."