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iPhone gives AT&T a boost

AT&T posts lower revenue and profits than it did a year ago, but earnings weren't as bad as they could have been, thanks to the iPhone.

Sales of Apple's iPhone provided a much needed boost to AT&T earnings in the second quarter, but the company's revenue and profits still dipped compared with the same quarter a year ago.

AT&T activated more than 2.4 million iPhones during the second quarter, the company reported Thursday. More than a third of these customers were new to AT&T. The company added 1.4 million net subscribers to the quarter, including 1.2 million customers with monthly subscription plans.

Analysts had expected the company to add about 1.08 million new subscribers, according to Reuters.

The new iPhone 3GS, the latest generation of iPhone in the Apple lineup, went on sale in June. Previously, Apple had said the company sold more than a million phones in the first weekend.

Despite the boost from the iPhone, AT&T's profits dipped compared with the same quarter last year.

The company reported a profit of $3.2 billion, which is down from $3.77 billion during the same quarter a year ago.

Revenue also fell to $30.73 billion from $30.87 billion. Analysts had expected revenue of about $30.64 billion, according to Reuters.