AT&T Inc., the largest U.S. telephone-service provider, released its second quarter earnings report for 2006 on Tuesday, highlighting stronger revenue growth due to increased contributions from Cingular wireless and its wire line operations.

The Texas-based firm reported a net income of $1.81 billion for the quarter, an increase of 81 percent from the $1 billion it earned a year ago. Its earnings per share (EPS) was 46 cents, an increase of 53 percent from 30 cents last year.

Analysts had expected an EPS of 53 cents before special items, according to Reuters estimates. This figure would be surpassed if the merger benefits between AT&T and BellSouth were included, bringing the EPS to $0.58.

The second-quarter consolidated revenues were $15.8 billion, up 53.2 percent from pre-merger revenues of $10.3 at the same time last year. Sales rose 53 percent in the same period.

Total wire line revenues in the second quarter were $14.8 billion, up 59.3 percent from the $9.3 billion reported in the second quarter of 2005. The major driver was growth in the regional areas particularly from small/medium businesses, which produced a positive trend due to increase customer's subscription for both data and voice services.

Other factors contributing to its positive growth were the stability of the wholesale price and the enterprise trend. Enterprise revenues continued to experience, strong volume growth year-after-year, double-digit growth in IP data services such as hosting, virtual private networks and managed Internet services

On July 20, Cingular, the largest U.S. mobile-phone services company, stated it added 1.5 million subscribers for the quarter, giving it a total of 57.3 million customers. Second-quarter revenues were up $9.2 billion, an increase of 7.1 percent versus the previous year second quarter.

Earlier this year, BellSouth and AT&T announced they would merge their operations, stating that one of the first benefits seen would be to streamline the ownership and operations of Cingular Wireless, which was jointly owned by AT&T and BellSouth. The company estimated that the merged entity would bring about a cost savings of $700 million to $900 million.

AT&T