AT&T shares rose 1.7 percent in after-hours trading on Thursday.

Reporting results for the first time since closing its $48.5 billion purchase of satellite TV operator DirecTV in July, AT&T lifted its adjusted earnings forecast to $2.68-$2.74 per share from $2.62-$2.68.

"It's early days, but it seems like they are gaining some traction in cross-selling ... and gaining momentum throughout the quarter selling DirecTV in wireless stores," Jefferies analyst Mike McCormack said.

As the U.S. wireless market stagnates, AT&T is seeking new revenue streams and betting on DirecTV's satellite TV business to help beef up its bundles of cellular, broadband, TV and fixed-line phone services. It has been expanding in Mexico after the recent purchase of the third and fourth largest wireless carriers in that country.

AT&T's net income, excluding DirecTV, fell to $3 billion, or 50 cents per share, in the quarter ended Sept. 30, from $3.13 billion, or 60 cents per share, a year earlier. Excluding items, earnings of 74 cents per share beat the average analyst estimate of 69 cents according to Thomson Reuters I/B/E/S.

Total operating revenue rose 18.6 percent to $39.1 billion, short of the average estimate of $40.4 billion.

Like its rivals, AT&T is now making customers pay for their phones while charging them lower service fees. Previously, carriers favored two-year contracts that included heavily subsidized phones.

AT&T has also simplified its plans and billing system, leading to fewer customer service calls and more savings, executives said on a conference call after its earnings report.

Among wireless consumers, AT&T reported 89,000 postpaid or monthly phone net new subscribers and 622,000 tablet net additions. It added 466,000 prepaid subscribers in the quarter.

DirecTV, whose pay-TV subscriber numbers fell in the second quarter, had 26,000 net additions in the latest period, AT&T said. However, it lost 91,000 AT&T U-verse video customers.

AT&T's rate of churn, or customer defections of monthly wireless users, was 1.16 percent in the quarter, higher than expected, of Jefferies said.

(Reporting by Sudarshan Varadhan in Bengaluru and Malathi Nayak in New York; Reporting by Kshitiz Goliya in Bengaluru; Editing by Sriraj Kalluvila and Richard Chang)

By Sudarshan Varadhan and Malathi Nayak