AT&T Inc.'s (NYSE:T) share price gained $1.27 to close yesterday at $36.63, and rose even further after hours, spurred by Cingular's strong earnings report yesterday, its last as an independent entity. Today's AT&T quarterly and year-end report offered more good news for investors, once again clearly based on the strength AT&T's wireless business.

With merger-related costs excluded, Wall Street had looked for 59 cents earnings per share, and AT&T reported that it would have been 61 cents, compared to 63 cents last quarter. AT&T also reported $24 billion in revenue without the merger, compared to consensus estimates of $21.3 billion. With BellSouth in the mix, it was a profit of $1.9 million, or 50 cents a share, compared to $1.7 million and 46 cents a year ago.

Like some analysts I mentioned in my earnings preview earlier this week, BloggingStocks readers were clearly optimistic (and apparently rightly so), as 73% of you polled predicted AT&T would beat expectations. Less than a quarter of you felt it would merely meet expectations.

AT&T also said it expects to see higher savings from the BellSouth merger than originally forecast, and that the newly acquired business would contribute modestly to income growth in 2007.

AT&T's stock started the day near $38.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.