Zacks Analyst Blog Highlights: CenturyTel, Qwest Communications, AT&T, Verizon and Sprint Nextel - Press Releases

For Immediate Release

Chicago, IL – April 23, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: CenturyTel (CTL), Qwest Communications (Q), AT&T (T), Verizon (VZ) and Sprint Nextel (S).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

CenturyTel, Qwest Ink $22B Deal

Rural telecom carrier CenturyTel (CTL), which now operates under the CenturyLink moniker, announced that it has forged a definitive agreement to acquire third-largest U.S. local-phone service operator Qwest Communications (Q) in an all-stock deal worth $10.6 billion. This represents one of the biggest mergers in U.S. telecom industry, which if consummated would unite two leading national landline phone operators.

Under the deal, CenturyTel is offering stock worth $6.02 a share for each Qwest share, representing a 15% premium over Qwest’s closing price of $5.24 on April 21, 2010. Qwest shareholders would receive 0.1664 CenturyTel shares for each share they own. Following the merger, CenturyTel shareholders would own 50.5% of the combined entity, with Qwest shareholders holding the remaining 49.5%. CenturyTel would assume $11.8 billion in Qwest debt, which takes the total deal value to $22.4 billion.

The merger makes sense as both CenturyTel and Qwest remain challenged with hemorrhaging landline voice businesses and are contending in an industry that is rapidly consolidating. Both these operators are struggling to compete with Tier-1 national carriers such as AT&T (T) and Verizon (VZ), which offers a myriad range of communication services such as fixed voice, wireless, broadband and video.

CenturyTel has emerged as one of the largest rural telecom carriers in the U.S. following its acquisition of local telephone service provider Embarq Corporation, a spin-off from Sprint Nextel (S), in July 2009 for $11.6 billion. However, the carrier continues to experience a decline in voice access lines as it contends with burgeoning competition from other service offerings (such as VoIP) from cable operators.

Denver-based Qwest provides local phone service to roughly 10.3 million customers in 14 Midwestern and western U.S. states. However, the carrier remains more challenged than the other regional telephone companies (“Baby Bells") AT&T and Verizon, given the lack of its own wireless and satellite TV services.

This has prevented Qwest from achieving a meaningful penetration in these lucrative markets. Moreover, erosion in legacy landline business due to wireless substitution continues to weigh on the carrier’s top-line.

Both companies' boards have approved the merger deal, which is expected to close in the first-half 2011. The merger will be accretive to CenturyTel’s free cash flow and is expected to generate cost synergies of roughly $625 million over 3−5 years following the closure of the deal. Each company plans to continue their respective dividend policy until the completion of the transaction.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Zacks Investment Research