Cingular posted mixed second-quarter numbers late Wednesday, as the nation's No. 2 cell-phone service provider looks ahead to a big acquisition.

The company, a venture of local telco giants SBC ( SBC) and BellSouth ( BLS), posted second-quarter earnings of $351 million. That's down from the year-ago $410 million in spite of a 7% gain in revenue, to $4.16 billion.

Cingular, which is due to acquire stumbling No. 3 player AT&T Wireless ( AWE) around year-end in a $41 billion deal, said it added 428,000 net subscribers in the latest quarter. Gross customer adds were 2.4 million, the company said.

Churn, which measures the rate of monthly user defections, rose 20 basis points from a year ago to 2.7%. Churn is the scourge of the capital-intensive wireless industry, where providers must try to keep customers over the long haul in order to boost their profit margins.

The company also said it completed its nationwide network overlay of next-generation technology six months ahead of schedule.

"Cingular has kept its focus, and we continue to execute well, delivering on our commitments," said CEO Stan Sigman. "In the second quarter, we achieved solid subscriber growth, with a substantial upturn in retail postpaid net adds. Our margins continued to improve. And thanks to the outstanding work of our employees."