For the three months ended Dec. 31, the nation's largest provider of local phone, cellular and DSL Internet services posted net income of $1.94 billion, or 50 cents a share. In the same quarter a year earlier, earnings totaled $1.66 billion, or 46 cents per share.
Fourth-quarter revenues reached $15.9 billion, a 23 percent increase from $12.9 billion in the final three months of 2005.
The earnings report included only two days' worth of results from BellSouth, which AT&T acquired for $86 billion in late December, gaining 100 percent ownership of Cingular Wireless and extending the Texas-based company's local phone territory across the Southeast. As Cingular was still 40 percent owned by BellSouth for most of the fourth quarter, AT&T's revenue figure didn't include sales by the cell phone venture.
In its final quarter as an independent company, BellSouth earned net income of $1.2 billion, 29 percent higher than a year earlier . Revenue increased 4.6 percent to $9.1 billion.
AT&T's latest results included merger expenses from late 2005's acquisition of the AT&T long-distance business by SBC Communications, which then renamed the combined company AT&T. Excluding those merger expenses, AT&T's fourth-quarter profit would have been 61 cents per share, surpassing the 59 cents predicted by analysts surveyed by Thomson Financial.
The company noted that full-year savings from the purchase of the AT&T long-distance business totaled $1.1 billion, significantly more than the $600 million to $800 million initially projected.
AT&T also revised its savings projection from the BellSouth takeover, saying it would eliminate between $800 million and $1.2 billion during 2007, up from an earlier prediction of between $500 million to $800 million.
"Our execution continues to be solid, we closed the year strong, and AT&T has excellent momentum heading into 2007," said Edward E. Whitacre Jr., chairman and chief executive officer, in a statement.
AT&T also reaffirmed its previous guidance for 2007, saying it expects double-digit growth in earnings per share and growing cash flow.
The new AT&T, which began rebranding Cingular under the AT&T name earlier this month, had strong growth in wireless subscribers, adding a net 2.4 million customers for a total of nearly 61 million.
The wireline segment of the business, which has been declining as customers shift to wireless Internet-based phone service, expanded its regional business revenues and its enterprise Internet data services.
For the year, AT&T reported $7.36 billion in net income, or $1.89 per share, a 54 percent increase over the $4.8 billion, or $1.42 per share, earned in the year-ago period. Revenue was $63.1 billion, a 44 percent increase from the $43.8 billion in 2005.