AT&T Profit Up on Wireless, Internet Growth

Top U.S. telecommunications service provider AT&T Inc. (T) said Tuesday quarterly profit and revenue rose, helped by growth in wireless and Internet subscribers.

Second-quarter net profit rose to $2.9 billion, or 47 cents a share, from $1.8 billion, or 46 cents a share.

On an adjusted basis, which excludes costs and accounting effects related to acquisitions, profit rose to 70 cents per share from 58 cents.

Revenue rose to $29.5 billion from $15.8 billion. Adjusted revenue, which combines sales from AT&T, BellSouth and Cingular Wireless in all periods, rose 2 percent to $29.8 billion.

Analysts on average forecast adjusted earnings of 67 cents per share, while the adjusted revenue was in line with expectations, according to Reuters Estimates.

The wireless unit —which has scrapped the Cingular Wireless name for the AT&T brand— added 1.5 million subscribers in the quarter, bringing the total to 63.7 million.

AT&T, which began selling Apple's iPhone on June 29, said it activated 146,000 iPhone subscribers in the first two days of the launch. More than 40 percent of those subscribers were new customers, it said.

AT&T has been relying on wireless and Internet services for growth, amid a decline in traditional phone service subscribers. It bought BellSouth Corp. late last year, consolidating ownership of their joint wireless venture.

AT&T expects to continue to operate at the top end of its previously provided outlook for a 2007 operating income margin range of 23 percent to 24 percent.

The company also said costs for its new Internet-based video service, called U-Verse, was in line with previous estimates.