NEW YORK (CNN/Money) - SBC Communications posted a drop in first-quarter earnings Thursday but still easily beat Wall Street expectations for the period.

The company earned $1.4 billion, or 42 cents a share in the quarter, excluding special items, down from $1.6 billion, or 48 cents, on the same basis a year earlier. Earnings tracker First Call had a consensus analysts forecast of 36 cents, with a range of 32 to 43 cents.

Including accounting changes and a gain from the sale of its interest in Cegetel, the company earned net income of $5.0 billion, or $1.50 a share, compared with a net loss of $193 million, or 6 cents a share, it posted a year earlier.

Revenue, including results from its 60 percent ownership of Cingular Wireless, slipped to $12.5 billion from $12.6 billion a year earlier, but that also beat the First Call forecast of $12.1 billion.

The company said it saw robust growth in high speed Internet service and long-distance subscribers, which partly offset continued revenue pressure and loss of some customers due to economic and competitive factors. The company left its full-year earnings guidance unchanged.

Shares of SBC (SBC: Research, Estimates), a component of the Dow Jones industrial average, gained $1.82, or 9 percent to, $21.80 Wednesday ahead of the report.