Embarq 3Q06

Imagine being given an ILEC. Imagine doing nothing with it. That's what Embarq did, letting the revenue flatten at $1.6B. Dan Hesse, CEO, said he would ride DSL.

"During the quarter, the company said it offset the loss of about 119,000 access lines by adding 84,000 new high-speed Internet subscribers. Embarq also added 19,000 wireless subscribers and 15,000 satellite television subscribers during the quarter."

Let me point out that the access lines are high ARPU, low support and DSL is low ARPU, high support. And DSL will start to flatten. Wireless and TV are just marketing agreements, btw.

Cable Voice service hasn't hit Embarq like it has at&t and VZ - to the tune of 80% of the market. At only 55%, "the slower assault should allow Embarq extra time to "innoculate" its customers with offers to keep them from switching once competition arrives," Hesse said.

Embarq's earnings dropped 34% from last year. "Embarq attributed the earnings drop to $23 million in non-recurring separation expenses stemming from its May spinoff from Sprint Nextel. The company also said it recorded $18 million in unanticipated long-distance expenses during the quarter."