AT&T

(T) - Get AT&T Inc. Report

topped analysts' estimates for the second quarter, but, as expected, the bottom line dropped significantly from the same period a year earlier.

The company posted earnings from continuing operations of 4 cents a diluted share, excluding other income, asset impairment charges and the effects of the

AT&T Wireless

(AWE)

spinoff. The company earned 47 cents a share in the year-ago quarter. Including both continuing and discontinued operations, AT&T lost 5 cents a share. According to

Thomson Financial/First Call

, analysts were looking for earnings of 3 cents a share.

For the third quarter, AT&T forecast earnings from continuing operations, excluding other income, of 2 cents to 5 cents a share. Wall Street is calling for income of 6 cents a share. The company also said revenue for continuing operations in the third quarter could decline "in a range similar to the second quarter," and "could be subject to further downward pressure" if the U.S. economy weakens.

The company reported second-quarter revenue from continuing operations of about $13.33 billion, a 3% decline from the year-ago period. Revenue from AT&T Wireless, which is now a separate company, isn't included in the total revenue results. AT&T attributed the revenue decrease to a continued decline in long-distance voice revenue, but the dropoff was partially offset by strong results from the company's broadband unit and from business data and Internet Protocol services.

AT&T Broadband

TheStreet Recommends

reported a top line of $2.6 billion, up 13.7% from the same quarter last year, including the results of

MediaOne

in both periods and adjusting for other cable transactions.

TheStreet.com

examined what the broadband division's results

would mean to the parent company in a separate story. Last week, AT&T rejected a bid from

Comcast

(CMCSK)

for the broadband operations.

Shares of AT&T, a component of the

Dow Jones Industrial Average, dropped 4.1% to $20.05 in regular-session

New York Stock Exchange trading.