Verizon third-quarter earnings, revenue beat Wall Street estimates NEW YORK (Reuters) - Verizon Communications Inc on Thursday posted stronger- than-expected third-quarter earnings and revenue driven by wireless growth, sending its shares up 4 percent. The subscriber shortfall caused some concern that the company, the first U.S. telephone operator to report this quarter, was losing market share to rivals such as T-Mobile US Inc. Chief Financial Officer Fran Shammo conceded some lower-spending customers moved to rival services in the quarter even as he told analysts on the company's quarterly conference call that "we continue to gain market share." Instead, he blamed the subscriber shortfall on shortage of Apple Inc's iPhone 5S. About one-half of the Verizon Wireless smartphone activations were iPhones, representing roughly 3.9 million iPhone activations. "The shortage on the 5S was a significant issue for the quarter," Shammo told Reuters in an interview. Hudson Square analyst Rethemeier said the profit margin would likely come down in the fourth quarter due to steep holiday season costs, since the company kept its wireless margin target for the year despite the strong third-quarter number. Verizon, which competes with cable companies in television and broadband services, said it added 173,000 net FiOS Internet connections and 135,000 net FiOS video customers in the quarter. Shammo said Verizon terminated a technology joint venture with cable rivals Comcast Corp, Time Warner Cable and privately held Brighthouse Networks for competitive reasons. The venture, which had worried some consumer advocates, was set up to develop converged wireless and wireline products for consumers when Verizon agreed to buy wireless spectrum for its cable rivals. The cable operators still resell Verizon Wireless services in markets where they do not compete but Shammo said that the technology venture was killed because of competition concerns. "What was realized was that the cable companies didn't want to jointly develop something that FiOS was going to get at the end of the day and of course we weren't doing to jointly develop something that FiOS wouldn't get," Shammo said. There was no meetings of the minds. Verizon shares rose 3.9 percent to $49.14 in afternoon trade on the New York Stock Exchange. Reporting by Sinead Carew; Editing by Jeffrey Benkoe and Marguerita Choy