AT&T Earnings Top Estimates on Record iPhone Activations; Raises Outlook

AT&T (T) reported double-digit earnings growth in the second quarter, driven by continued growth in mobile broadband, including a record quarter for Apple's (AAPL) iPhone activations, gains in IP-based and strategic business services and disciplined execution on cost initiatives, the company said.

Second quarter net income was $4.0 billion, or 68 cents per share. Excluding a one-time gain from the Telmex Internacional transaction, earnings grew 13.0% to 61 cents per share. In last year's quarter net income was $3.2 billion, or 54 cents per share.

AT&T's revenue totaled $30.8 billion, up $194 million, or 0.6%, versus the year-earlier quarter, marking the company's second consecutive quarter with a year-over-year revenue increase. Adding back Sterling Commerce, revenues are $30.9 billion.

Results beat earnings estimates of 57 cents per share, and revenues were in line with Wall Street's expectation.

AT&T iPhone activations totaled 3.2 million, the most quarterly iPhone activations ever. Approximately 27% of those activations were for customers who were new to AT&T.

"We delivered another strong quarter, with improved revenue trends, double-digit earnings growth and solid cash flow. These results add to our confidence going into the second half of the year," said chairman and CEO Randall Stephenson. "We continue to see positive signs of growth in almost every customer segment of our business, especially wireless, which speaks to the quality of our execution and our leadership in the industry's most powerful growth driver -- mobile broadband."

Due to improved revenue trends and strong execution, AT&T said, it has raise its earnings outlook for full-year 2010 stable-to-improved earnings per share growth to strong earnings per share growth.