AT&T announced strong growth for its second quarter 2008 that ended June 30th. Wireless revenues were up nearly 16 percent and revenues for specialized access via Internet, messaging and e-mail were up 52 percent. While the iPhone 3G launch came after the close of the quarter for AT&T, the iPhone product was credited with AT&T's wireless transformation by CEO Randall Stephenson.

"Our results demonstrate the great strength of AT&T's assets and our ability to execute with focus and discipline," said Randall Stephenson, AT&T chairman and chief executive officer. "Earnings growth continues to be solid, our wireless momentum is strong, our major growth and cost-reduction initiatives are on track, and we continue to return substantial value to shareowners...

"The Apple iPhone 3G is a dramatic example of this transformation," Mr. Stephenson added. "In the days following our exclusive U.S. launch of this new device, powered by the nation's fastest 3G wireless network, customer response has been everything we had anticipated and more. This strengthens our wireless business, and it reinforces our positive view of the opportunities ahead for AT&T and the industry."

AT&T provided the following recap of its second quarter results.

• $0.63 reported earnings per diluted share, up 34.0 percent versus $0.47 in the year-earlier second quarter
• $0.76 adjusted earnings per diluted share, up 8.6 percent from $0.70 in the second quarter of 2007
• Consolidated operating income margin expansion to 21.3 percent reported from 16.8 percent in the year-earlier quarter and 25.1 percent adjusted versus 23.9 percent
• 15.8 percent increase in wireless revenues with wireless data revenues from areas such as Internet access, messaging and e-mail up a robust 52.0 percent
• More than 1.3 million net gain in wireless subscribers to reach 72.9 million in service; postpaid subscriber churn down to 1.1 percent, lowest level in company's history
• 16.1 percent growth in wireline IP data revenues driven by strong increases in consumer video and broadband revenues and in business services such as virtual private networks (VPNs), managed Internet services and hosting
• Significant turnaround in wholesale customer revenues, second consecutive quarter of sequential growth reflecting solid demand from wireless carriers, Internet service providers and other customers
• Further ramp in AT&T U-verse TV subscribers, with a net subscriber gain of 170,000 to reach 549,000 in service; on trajectory to exceed 1 million subscribers in service by the end of this year

Apple ran out of iPhone 2Gs well before AT&Ts second quarter ended, but the wireless company continued to generate revenue from previously purchased iPhones. Analysts expect Apple and AT&T to sell upwards of 6 million iPhone 3Gs in just the last half of 2008, so AT&T's performance for the next two quarters will be watched even more closely.

AT&T reported that it sold almost twice as many units in the first 12 days after the iPhone 3G launch compared with the original iPhone 2G in June 2007.