NEW YORK (AP) – AT&T Corp. swung back to a third-quarter profit after a loss due to a huge asset writedown a year ago, earning $520 million in what might be the final quarterly report before the iconic telephone company is acquired by former subsidiary SBC Communications Inc.

The company, which in January agreed to be acquired by SBC for $16 billion, also boosted its revenue and profit margin forecast for the year. Its shares rose more than 2 percent in morning trading.

The profit reported Friday amounted to 64 cents per share for the three months ended Sept. 30. The results included a $92 million expense relating to investments in aircraft leases with airlines that have filed for bankruptcy, as well as $20 million in expenses for the SBC deal and a $41 million pretax benefit.

In the third quarter of 2004, AT&T lost $7.15 billion, or $8.99 per share, as the company wrote down the book value of its national telecommunications network by $11.4 billion following a decision to retreat from the consumer telephone business. Excluding that expense, other restructuring charges and one-time tax benefits, it would have earned $262 million, or 33 cents a share, a year ago.

The latest results appeared to top Wall Street forecasts by a sizable margin, though Thomson Financial said the assortment of one-time charges and credits made it unclear whether the 51 cent profit forecast from its analyst survey was directly comparable to the figures emphasized in AT&T’s report.

Shares of AT&T rose 41 cents, or 2.2 percent, to $18.99 in morning trading on the New York Stock Exchange.

Third-quarter revenue fell 13.3 percent to $6.62 billion from $7.64 billion in the year-ago period, as the long-distance calling and data businesses continued to shrink, AT&T said. Business services accounted for $5.1 billion of the revenue total, and consumer services generated $1.5 billion.

While competitive pressures continue to squeeze the business, the company said its overall revenue decline for 2005 might be smaller that previously expected.

AT&T said it now expects full-year revenue to total at least $26.5 billion, about a half billion dollars above the range estimated by the company at the start of 2005. The company also boosted its estimate for operating profit margin, predicting a percentage “in the low teens, outpacing prior expectations.”

SBC and AT&T originally said their deal would close in the first half of 2006, but now say it could close before January.

They have secured government approval for the deal from all but a few key states, and are still waiting to see whether regulators at the Justice Department and Federal Communications Commission will seek any conditions before allowing it to proceed.

“We don’t think there’s any need for divestitures. It is conceivable there will be some conditions on the merger, but we certainly don’t see any need for them,” said Thomas Horton, AT&T’s chief financial officer, in an interview.

“Regulators are going through a rigorous evaluation of the merger and we’re confident that at end of the regulatory process that this merger will not harm competition and will be good for customers,” he said.

Though AT&T as a company is slated to be absorbed into SBC, the AT&T monicker may live on as the combined company’s name or the brand for its products.

Recent news reports have indicated that SBC, whose name was originally Southwestern Bell Corp. and remains a largely regional brand, is seriously considering a switch to the AT&T name. San Antonio-based SBC has declined comment.

For the first nine months of 2005, AT&T’s profit totaled $1.36 billion, or $1.68 per share, on revenues of $20.40 billion. That compares with a net loss of $6.74 billion, or $8.48 per share, on revenues of $23.26 billion.

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