BellSouth takeover lifts AT&T earnings

AT&T's earnings jumped 61% in the second-quarter, driven mostly by its acquisition of BellSouth but also boosted by new wireless subscribers and better sales to large business customers, an Asssociated Press report said.

The Associated Press said the US largest provider of broadband Internet and land and wireless phone services said that 146,000 subscribers activated new iPhones in the first 30 hours of sales as the quarter closed, news that seemed to disappoint Apple investors a day ahead of that company's earnings release.

For the quarter that ended June 30, AT&T said net income rose to $2.9 billion from $1.81 billion in the prior year's quarter, the report said. 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% of the early iPhone activations done by new AT&T subscribers. Sales continue to be strong in July, the report also said.

IPhone buyers sign two-year contracts and have higher-than-average rate plans and will likely continue to boost demand for wireless data services, an area of business that saw strong growth during the second quarter, the report also said.

Analysts said any reaction of first-day sales of the iPhone were probably unfair.

'The activations might have been a little light, but I'm not necessarily sure you can read a lot into that,' Christopher King, an analyst for Stifel Nicolaus & Co. quoted by the Associated Press report said.

The quarter overall was in line with expectations, he said.

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 like messaging, downloads and laptop connectivity. Revenue from that business was up 67% for the quarter to $1.7 billion, the report further said.