AT&T Profit Soars iPhone Gives Cell Provider a Boost

SAN ANTONIO – AT&T Inc.’s earnings jumped 61 percent in the second-quarter, driven mostly by its acquisition of BellSouth Corp. but also boosted by new wireless subscribers and better sales to large business customers.

The nation’s largest provider of broadband Internet and land and wireless phone services said Tuesday that 146,000 subscribers activated new iPhones in the first 30 hours of sales as the quarter closed – news that seemed to disappoint Apple Inc. investors a day before that company’s earnings release. The hotly anticipated device that combines phone, media player and Web-surfing capabilities can only be used on AT&T’s network as part of exclusive deal between the companies.

For the quarter that ended June 30, AT&T said net income rose to $2.9 billion, or 47 cents per share, from $1.81 billion, or 46 cents per share in the previous year’s quarter. Wireless subscribers rose by 1.5 million to 63.7 million, AT&T said.

A tiny amount of that growth was driven by the iPhone introduction, with more than 40 percent of the early iPhone activations done by new AT&T subscribers. Sales continue to be strong in July.

IPhone buyers will likely continue to boost demand for wireless data services, an area of business that saw strong growth during the second quarter, he said.

Excluding acquisition costs, AT&T had earnings of 70 cents, up from 58 cents per share for the same three months last year and above the 67 cents average estimate of analysts polled by Thomson Financial.

Revenue for the quarter was $29.5 billion, up from $15.8 billion in the year-earlier quarter.

Revenue growth continues to be driven by wireless data use for services such as messaging, downloads and laptop connectivity. Revenue from that business was up 67 percent for the quarter to $1.7 billion, a trend Mr. Lindner said would continue to rise.

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