Citing growth in wireless and internet subscribers, as well as sales of the iPhone, helped AT&T (NYSE: T) hit its ninth consecutive quarter of double-digit earnings growth, as Q2 profit rose 61.1 percent to $2.9 billion, or 47 cents a share, from $1.8 billion, or 46 cents a share. Revenues were up 29.5 billion, an 86.7 percent gain from $15.8 billion in Q206, prior to AT&T’s acquisition of BellSouth and the accompanying consolidation of wireless results. As has been pointed out over the past month, sales of the Apple iPhone, which has an exclusive contract with AT&T Wireless, have been robust. The June 29 launch allowed for less than two days of sales and activations before the end of the quarter. In that time, AT&T activated 146,000 iPhone subscribers, more than 40 percent of them new to AT&T. The company’s other Q2 results included:

-- AT&T posted strong video growth in Q2 as its U-verse broadband services are now available in parts of 23 metro areas. By the end of Q2, AT&T had 51,000 U-verse video subscribers, up from 13,000 three months earlier. Total video connections, which include AT&T U-verse service and bundled satellite television service, increased by 200,000 in the second quarter to 1.9 million. About 5.9 percent of AT&T’s primary consumer lines also had a video solution from AT&T, up from 3.8 percent a year earlier.

-- AT&T’s high speed internet connections, which include DSL, AT&T U-verse high speed internet and satellite broadband services, increased by 400,000 in the quarter, reflecting typical seasonality due to end-of-school-year disconnects. At the end of the quarter, AT&T had 13.3 million consumer and business high speed Internet connections, up 2.2 million, or 20 percent, versus a year earlier.

-- Wireless data revenues increased 66.9 percent versus the year-earlier quarter to $1.7 billion – driven by strong increases in both consumer and business data usage including messaging, downloads, media bundles, laptop connectivity, smart phone connectivity and enterprise vertical market solutions. At the end of second quarter, AT&T’s wireless operations had nearly 37 million active data users, up 39 percent over the past year. The telco reached 63.7 million wireless subs in Q2, up 6.4 million over the past year. More to come. Earnings release | Webcast

Update: Demand for the iPhone in AT&T retail stores is up above past historical levels for other mobile products, said Rick Lindner, AT&T’s CFO, during the conference call. “It may be an understatement to say that no device in the history of the the wireless industry” has come out with more fanfare than was the case with the iPhone.” Offering a sense of how the iPhone is affecting wireless data revenues, Lindner added, “Historically, data growth has been led primarily by text messaging. But one of the thing we’re seeing the iPhone do is broaden the appeal and dramatically ratchet up expectations for a data-rich wireless experience” - which includes email, video and music. He also noted that during the quarter, the company spent a lot to promote the iPhone’s launch and AT&T expects to reap more of the benefits of its association with the device in Q3.

-- Broadband Growth: Aside from focusing on the iPhone, Lindner also said that the company believes it can strongly grow its broadband usage. “When you look at the fact that we’ve made good progress penetrating our base, still at just 35 percent on average of penetration of our primary access lines, we feel like there’s still substantial room to grow broadband. Two other things that are happening in broadband that I think are important. One is, and we’ll see how this quarter turns out when everyone reports… it looks like we’re getting 50 percent of broadband share.”

-- iPhone Misses Investors’ Target: NYT: Although AT&T’s earnings solidly analysts’ estimates, iPhone sales didn’t, which brought down shares of both AT&T and Apple stock by Tuesday afternoon. Although AT&T executives expressed great pleasure with the 146,000 iPhone customers who signed up by the end of Q2, that number was well below analyst estimates, which ran as high as 500,000 units. Shares of Apple were down as much as 5 percent in early trading and about 2.5 percent at midday, trading around $140. AT&T’s shares were down less than 1 percent, at slightly under $40.Eugene Munster, an Apple analyst with Piper Jaffray, said iPhone sales were largely in line with analysts’ initial targets. But as the hype and mania around the product grew, so did investor expectations. “Our belief all along has been that there is a surge of demand coming for the iPhone, but it is hard to predict when that surge will hit,” he said.