The seven regional telephone companies surprised analysts with a sparkling earnings performance in 1984, while former parent American Telephone & Telegraph Co. came in with a more lackluster showing.

The regional telephone companies, spun off of AT&T last year as part of the agreement that broke up the Bell System, also "outperformed the world" as investments, said John S. Bain, a Shearson Lehman/American Express Co. analyst. "They did better than bonds, better than AT&T, better than the independent telephone companies . . . it's been a good year for investors."

The regional telephone company stocks have increased in price by an average 22.1 percent since Dec. 30, 1983, and produced a dividend yield of 9.6 percent for a total return of 31.7 percent, he said.

The companies have performed particularly well against the backdrop of utilities as a whole. The Dow Jones utilities average was up 13.4 percent last year, with a dividend yield of 10.2 percent and a total return of 23.6 percent.

AT&T's stock price rose 9.1 percent and produced a dividend yield of 6.7 percent for a total return on investment of 15.8 percent, Bain said.

The regional companies' earnings in their first year ranged from $828.5 million to $1.26 billion, with Bell South's at the high end, within reach of its former parent's earnings of $1.38 billion.

"All of the regionals had very strong earnings in 1985 and all beat their estimates," said Marianne G. Bye, a Prudential Bache Securities Inc. analyst. "They all used strong cost controls to override a number of industry negatives." The companies have been doggedly cutting costs through employe layoffs, attrition and early retirement.

Bell Atlantic Corp., the regional telephone company that owns the C&P Telephone Cos., has trimmed its 80,000-employe work force by 2,000 and plans to reduce it by 10,000 by 1990.

"The regionals did better in terms of net income than they had expected originally, and substantially beat analysts' estimates ," Bain said.

The telephone companies have also succeeded with state regulators, who have granted them $5.1 billion in increases out of $10.9 billion requested in 1984.

Earnings of some of the regional companies have been affected by refunds ordered by the Federal Communications Commission, which found they exceeded their authorized rate of return in 1978, said Prudential's Bye.

Another factor affecting earnings in the fourth quarter was the companies' expanding construction programs, said Bradford L. Peery, an analyst with Hicks Peery Inc., a San Francisco investment banking firm. "Some companies had large increases in their construction," Peery said. "There is a huge increase in maintenance expenses that may not recur."

In the coming year, analysts predict modest earnings growth of about 3 percent. "Expense control is wonderful, but you can't do it forever," said Bain.

The companies will have to take advantage of the $2 end-user access charges for connection to the long-distance network that will go into effect this coming summer, Bain said. The process of introducing the charge, which has met with political resistance, may be a slow one, he added.

"In 1985, we are expecting a reasonably strong stock market, and it will be much more difficult for the companies to outperform the market," said Peery. "I expect to see a 6 to 8 percent increase this year for regional stock prices, but the market may do better than that." Analysts say the companies will most likely increase their dividends in the second quarter of 1985.

AT&T earned $1.38 billion in 1984, trailing its own forecasts and analysts' estimates. Right before the breakup, the company had predicted a profit of $2.1 billion, or $2.02 a share, for 1984. Actual profit equaled $1.25 per share on revenue of $33.2 billion. For the fourth quarter, the company's profit was $379 million (34 cents a share) on revenue of $8.41 billion.

"1984 wasn't nearly as good a year as AT&T thought it would be," said Bye. "They saw a lot of volatility in the communications business, at the same time they are undergoing a terrific transition." Competitors like MCI and GTE/Sprint have been slowly chipping away at AT&T's long-distance market share.

The company also experienced component shortages for new computer products whose entry into the market was delayed, spent large amounts on new product development and faced serious competition in equipment markets. Some state regulators also increased the amount of money AT&T must pay local telephone companies for connection to their networks.