Stock Pick: Embarq

Embarq showed strong Q1 result

The company announced its quarterly result for the first quarter of 2008, including record earnings and cash flow. The company reported total revenues of $1.57 billion, operating income of $434 million, diluted earnings per share of $1.38 and cash flow before dividends of $286 million.

The company paid a dividend of $0.6875 per share in the first quarter, and repurchased approximately 3.35 million common shares at a cost of $135 million. Through April 25, 2008, the company purchased an additional 2.62 million shares at a cost of $104 million.

The company ended the quarter with net debt of $5.6 billion, a sequential reduction of $187 million.

The company reported a decline of 120,000 access lines in the first quarter, ending with 6.19 million access lines. During the quarter, the company added 63,000 high-speed Internet subscribers, bringing the total to 1.34 million. Video net additions totaled 17,000 during the quarter, resulting in the company ending the quarter with 217,000 of its customers subscribing to video services.

About Embarq Corporation

Embarq Corporation (NYSE: EQ), headquartered in Overland Park, Kansas, offers a complete suite of common sense communications services. The company has approximately 19,000 employees and operates in 18 states. EMBARQ is included in the S&P 500.

For consumers, EMBARQ offers an innovative portfolio of services that includes reliable local and long distance home phone service, high-speed Internet, wireless, and satellite TV from DISH Network® - all on one monthly bill.

For businesses, EMBARQ has a comprehensive range of flexible and integrated services designed to help businesses of all sizes be more productive and communicate with their customers. This service portfolio includes local voice and data services, long distance, Business Class High-Speed Internet, wireless, enhanced data network services, voice and data communication equipment and managed network services. EMBARQ believes that by focusing on the communities the company serves and by employing common sense and practical ingenuity, it is able to provide customers with a committed partner, dedicated customer service and innovative products for work and home.

Technical Analysis

Technically, the stock shows strong support at $39, but at the same time has strong resistant at $42. Once the stock crosses $42 successfully with high volume, the stock can easily touch $48 with long term target of $65+.

Short Term Target: $48
Medium Term Target: $58
Long Term Target: $65+

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