For the second straight quarter, AT&T Inc. (NYSE: T - message board) enjoyed solid revenue growth thanks to its strong wireless business and continued cost savings from the BellSouth merger. (See AT&T Reports Q2.)

    For the second quarter of 2007, AT&T earned $2.9 billion, or 47 cents a share, on revenues of $29.5 billion, compared to the same quarter a year ago when it earned $1.8 billion, or 47 cents a share, on revenues of $15.8 billion. Just like last quarter, the results include BellSouth data, which explains the huge yearly jump in revenues and income.

    The numbers were generally in line with analysts predictions according to Reuters Research , although revenues fell a bit short of the predicted $29.6 billion.

    AT&T continues to rely heavily on its wireless business as more and more consumers defect from their traditional primary access lines. Although the operation statistics show a growth in these lines, subscribers fell by 1.38 million when excluding the BellSouth territories.

    In the day-and-a-half of iPhone sales at the end of the second quarter, AT&T says it activated 146,000 of the devices with 40 percent of them being new customers. However, these numbers were disappointing for some Apple Inc. (Nasdaq: AAPL - message board) investors who bought into analyst estimates that had opening weekend sales projected as high as 500,000. Shares of Apple have fallen $6.57 (4.57%) to $137.45 so far today on the news.

    But despite the hype surrounding this new gadget, AT&T says the future of its wireless revenues will be driven by data traffic. "We're seeing strong growth across all product areas, including email, media, and other downloads," said AT&T CFO Rick Lindner on the earnings call.

    On the wireline side, AT&T's U-verse plods along with 51,000 subscribers, up from about 13,000 last quarter. AT&T maintains its goal of doing 10,000 U-verse installations a week by the end of 2007. The carrier says it will begin installations in the BellSouth territories at that time as well.