AT&T (T) - Get Report posted stronger-than-expected first-quarter earnings Thursday.

The Bedminster, N.J., long-distance giant, which is preparing to merge with Baby Bell



, cited lower depreciation expense as a result of a massive asset writedown taken last year.

For the quarter ended last month, AT&T made $529 million, or 66 cents a share, up from the year-ago $304 million, or 38 cents a share. Revenue fell 12% from a year ago to $7 billion.

The numbers beat the Thomson First Call analyst consensus estimate, which had called for earnings of 59 cents a share on revenue of $6.9 billion.

AT&T said business revenue dropped 9.4% from a year ago to $5.3 billion, while long-distance voice revenue dropped 17%. Local voice revenue slipped 4.6%.

AT&T closed Wednesday at $18.43.