Zacks Analyst Interview Highlights: Sprint Nextel, Embarq and Nextel Partners

Business Wire, August 2, 2006

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst David Weissman, who discusses Sprint Nextel (NYSE:S), Embarq (NYSE:EQ) and Nextel Partners (Nasdaq:NXTP).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

You recently conducted an interview based on your Buy recommendation of Sprint Nextel. What's the main reason you like the stock at this time?

There are several of reasons I like Sprint Nextel (NYSE: S). In addition to their cash generating ability, the overall telecom market has been out of favor for some time. It is my view that investors will tend to consider more stable, well recognized companies (often large cap) when market conditions are not necessarily showing positive momentum. Sprint has solid financials, solid market brand name and can grow even during turbulent market conditions.

The company has repositioned to focus on higher growth wireless and Internet segments, while divesting legacy local services, where growth rates were becoming stale. Sprint Nextel recently sold-off their local telephone business, Embarq (NYSE: EQ), a lower-growth business. The divestiture of Embarq brings a cash influx that addresses their debt and leverage The company continues to generate cash on a quarter-to-quarter basis and has a positive earnings trend.

What else has been going on with the company?

The net wireless subscriber count has been growing nicely. Last quarter they added approximately 1.3 million. They also completed an acquisition of Nextel Partners (Nasdaq: NXTP). Nextel Partners was primarily a rural, non-metropolitan area carrier and the acquisition is going to add network coverage and add additional subscribers to the Sprint total. Also, the introduction of high data rate services and, eventually mobile video, will have a material improvement on the trend for ARPU (average rate per user) as it continues to grow. The customer churn rate remains quite low, which is also attractive.

Read the full interview at http://at.zacks.com/?id=2647.

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