AT&T's (T) 4th Quarter Earnings Jump 25%

AT&T Inc. (NYSE: T) saw its 4th quarter earnings rise by 25% as it reported net income of $3.09 billion, or 51 cents per share. Compared with $2.4 billion, or 41 cents per share, in the 2008 4th quarter, which included one time costs.

Revenue slid 0.7% to $30.86 billion, as falling sales in AT&T's older local-phone business offset mobile growth.

According to analysts polled by FactSet Research, AT&T was expected to earn 51 cents per share on revenue of $30.87 billion.

AT&T is the nation's 2nd biggest wireless carrier and the only one that is licensed by Apple Inc. (Nasdaq: AAPL) to sell the popular iPhone.

The jump in AT&T's profits came in part due to massive restructuring cuts and the activation of 3.1 million iPhone accounts over the holiday season.

However, the company's network is becoming strained in large markets like San Francisco and New York.

"Network demands from soaring wireless data consumption remain a concern," said Bernstein Research analyst Craig Moffett.

AT&T's network will come under further pressure as more devices like Amazon.com, Inc.'s (Nasdaq: AMZN) Kindle2 and Apple's new iPad connect to it.

"Wireless is our No. 1 priority," said John Stankey, president of AT&T operations, in a conference call with analysts.

AT&T said it will increase capital spending this year by as much as 10% to $19 billion to address network congestion and to allow increased sales growth while reducing customer complaints.