AT&T reports Q2 income up 81 percent

AT&T posted robust second-quarter net income of $1.8 billion, up nearly 81 percent from the same period last year, driven in part by savings from the merger of AT&T and SBC Communications, the company said Tuesday before financial markets opened.

AT&T reported that earnings per share for the quarter, which ended June 30, came in at $0.46 compared to $0.30 in the same stretch of last year, and topped analyst estimates by $0.05 per share.

AT&T and SBC merged in November 2005. The year-ago results do not include revenue from the former AT&T.

Strong revenue from Cingular Wireless, in which AT&T owns a 60 percent stake, also boosted the quarter's financial report. Cingular picked up 1.5 million more subscribers in the quarter, hitting 57.3 million with lower subscriber "churn" or numbers of people who dropped their service with Cingular, AT&T reported.

Excluding merger-related costs, AT&T had earnings of $2.3 billion, up 59.6 percent from the second quarter of last year before the merger.

The largest telecommunications provider in the U.S. also said that it would "ramp up" its stock buy-back program. The company plans to buy back $10 billion shares by the end of 2007, with $2 billion to $3 billion this year, according to AT&T Chairman and Chief Executive Officer Edward Whitacre.

AT&T's wireline revenue for the quarter was $14.8 billion, compared to $9.3 billion before the merger. Cingular's wireless revenue was $9.2 billion, up 7.1 percent compared to the same period of last year. The wireless provider had operating income of $1 billion for the quarter, compared to $504 million in the same period of last year. Its operating income before merger-related expenses was $1.5 billion, up from the $1.2 billion posted in the same period of last year.

Shares of AT&T were up by $1.27, at $28.42, on the New York Stock Exchange within an hour after trading opened Tuesday.