May 7--The weak economy has boosted the rate at which business customers dropped phone service from Embarq Corp., the Overland Park-based company said Wednesday.

Embarq lost 144,000 phone line customers in the first three months of the year, a 24,000-line jump from the losses a year ago, largely because of losses of business lines.

CEO Tom Gerke said that the economy remained the biggest factor in lost business and that "economic disconnects were up especially among small business customers."

The overall disconnect pace, however, was slower than late last year, when 157,000 customers dropped service in the fourth quarter.

Revenues and earnings also dipped in the first quarter, falling 8 percent and 18 percent respectively.

At $174 million, earnings equaled $1.21 a share, compared with $212 million, or $1.37 a share, in the first quarter of 2008. Revenues were $1.35 billion in the quarter.

Gerke, however, declared the quarter the company's best in generating unencumbered cash and earnings per share. The latter comparison excluded a $26 million loss from the sale of its Embarq Logistics operation in the quarter.

The sale also cut into total employment as most employees transferred with Embarq Logistics.

Embarq now employs 15,500 nationally, including 2,800 in the Kansas City area.

Embarq, spun off from Sprint Nextel Corp., is close to completing its sale to Louisiana-based CenturyTel Inc. The transaction still requires approval by the Federal Communications Commission and regulatory bodies in five of the 33 states required.

Employees won't learn of their job status until after the CenturyTel merger is complete.

Gerke told analysts in a conference call that he remains confident of completing the merger before the end of June but could not say specifically when the transaction would close.

Both companies are working not only on the regulatory approvals but also on plans to integrate the businesses.

To reach Mark Davis, call 816-234-4372 or send e-mail to mdavis@kcstar.com.

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