AT&T Inc. (NYSE: T) reported a loss of $6.7 billion for the fourth quarter owing to the breakup fee it had to pay T-Mobile US Inc. for its failed merger attempt, as well as changes in how it reports pension benefits. (See AT&T Drops Bid to Acquire T-Mobile.)

The carrier did, however, report its best quarter yet for smartphone sales. It sold 9.4 million smartphones, including 7.6 million iPhone activations, handily beating out Verizon Wireless 's 4 million iPhones sold. (See VZ iPhone Boosts Data, Shaves Margins in Q4.)

AT&T lost $1.12 per share on revenues of $32.5 billion in the first quarter. A year earlier it reported a profit of $1.1 billion or 18 cents a share on revenues of $31.4 billion.

Non-GAAP earnings came out to 42 cents per share. Analysts polled by Thomson Reuters expected non-GAAP earnings of 43 cents a share on sales of $31.95 billion.

Shares of AT&T are down 56 cents (1.85%) to $29.65 in early morning trading.

— Sarah Reedy, Senior Reporter, Light Reading Mobile