NEW HAVEN, Conn. (AP) _ Despite a strike by thousands of workers, Connecticut's major telephone company, Southern New England Telecommunications Corp., today announced higher earnings for the third quarter of the year.

Earnings were $54.5 million, or 79 cents per diluted share, compared with $49.1 million, or 74 cents per share for the same period last year.

The announcement came as state regulators investigate whether the company earned too much money during the strike. The state Department of Public Utility Control also was examining how customer service was affected by the walkout.

The 26-day strike ended Sept. 18.

Union officials have claimed the company saved as much as $22.6 million in payroll and other labor costs during the strike and should return a portion of that money to its customers. The union also says service suffered during the strike.

Despite the higher earnings, SNET claimed an $8 million negative impact because of the strike by about 6,300 operators, customer service representatives and technicians. The company said the financial impact was somewhat offset by $6 million reaped through an accounting change.

``Fortunately, the recent strike is behind us and we are all diligently working to get customer service back on track,'' SNET Chairman and Chief Executive Officer Daniel J. Miglio said.

Net income from revenues and sales for the quarter were up 6 percent to $540.3 million. The company attributed much of the increase to a growing cable TV and Internet business, growth in cellular services and an increase in the interstate and international long-distance business.

Last month, the DPUC approved a proposed $4.4 billion merger between SNET and Texas telecommunications giant SBC Communications Inc. of San Antonio. That merger still requires approval from the Federal Communications Commission. The companies hope to merge by year's end.