updated 1/24/2008 11:58:44 AM ET 2008-01-24T16:58:44

AT&T Inc., the nation’s largest telecommunications company, earned $3.1 billion during the fourth quarter on gains in its wireless business and growth in its broadband Internet sales, the company reported Thursday.

The net income amounted to 51 cents per share. During the same period of 2006, the company earned $1.9 billion, or 50 cents per share. The results that quarter did not include the earnings of BellSouth or Cingular Wireless because AT&T’s takeover wasn’t completed until final days of the period.

Revenue in the fourth quarter nearly doubled to $30.35 billion from $15.9 billion in the previous year, but most of the growth came from the takeover of BellSouth.

Without the costs and accounting effects from acquisitions, the company would have earned 71 cents per share during the fourth quarter, in line with the expectations of analysts surveyed by Thomson Financial.

The company earned $11.95 billion in 2007, amounting to $1.95 per share. In the previous year, the company earned $7.36 billion, or $1.89 per share.

The massive integration of the old BellSouth and Cingular is on schedule and cost savings continue to be better than initially expected, the company said.

AT&T also reaffirmed its previous earnings growth guidance for 2008.

Shares of the telecommunications giant tumbled two weeks ago when Chairman and CEO Randall Stephenson told analysts at a conference that the company was seeing weakness in its broadband Internet and traditional wire phone businesses because of disconnections for nonpayment.

“Both products are impacted by some of the things we see in the housing market, slowdowns in home sales and new construction,” Rick Lindner, AT&T’s chief financial officer, said during a call with analysts.

Still, the company expects double-digit growth in its adjusted earnings per share for the year.

“The economy is always a risk, but when you look across our business, we’re relatively defensive in these kinds of downturns,” Lindner said.

Shares slid 86 cents, more than 2 percent, to $35.83 in early trading.

The telecom’s wireless business recorded record gains in subscribers and improved sales of higher margin services like data bundles for smart phones.

Already the nation’s largest wireless carrier, AT&T added 4.4 million subscribers in the quarter, including 1.7 million added with the acquisition of Dobson Communications in November. The company’s subscriber base reached 70.1 million.

The company, the exclusive U.S. carrier for Apple Inc.’s iPhone, has about 2 million iPhones on its network, Lindner said. About 40 percent of iPhone users switched from other carriers since the introduction of the much-anticipated device last summer.

The number on the AT&T network falls short of Apple’s reported 4 million iPhones sold, but Lindner said part of that is because of devices in inventory and sales of phones sent overseas.

During the fourth quarter, company saw growth in its consumer high-speed Internet connections and its sales of Internet services to large corporations during the quarter.

Some of those high-speed consumer connections were tied to the company’s Internet Protocol-based television service, U-verse. The service, which struggled early in its launch with glitches and delays, now has 231,000 subscribers and should exceed 1 million by the end of the year, company officials said.

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