AT&T sold more than 10 million smartphones in the fourth quarter, a record, the company said on Tuesday.
The total topped the previous record of 9.4 million sold in the same quarter in 2011.
The latest results suggested AT&T smartphone sales for all of 2012 will be about 26.7 million units, slightly ahead of its previous forecast of 26 million.
While smartphones help operators keep customers and attract new ones they also raise costs. Wireless service providers including AT&T pay hefty subsidies to handset makers so that they can offer device discounts to customers who commit to two-year contracts.
Wells Fargo analyst Jennifer Fritzsche said AT&T could miss her expectations for a wireless profit margin of 32.7 percent because of higher-than-expected smartphone sales.
Shares of AT&T were down 1.3 percent at $34.47 on Tuesday morning.
AT&T will announce fourth-quarter results on Jan. 24. Analysts, on average, expect earnings per share of 49 cents, compared with 42 cents for the same quarter last year, according to Thomson Reuters.