By JASON GERTZEN

Embarq, the former Sprint unit that sells local phone service and high-speed Internet connections in parts of 18 states, is cutting costs and focusing on rapidly growing niches while confronting continued deterioration in its home phone business.

Wall Street analysts such as Jonathan Levine at Jefferies & Co. think the Kansas company isn’t getting all the credit it deserves for executing a strategy that’s likely to continue boosting adjusted earnings in the near term.

That being said, Levine wrote in a new investor report Friday that he would be on the watch soon for possible merger and acquisition deals involving companies such as Embarq and Windstream, a local phone company out of Little Rock, Ark., that spun off Alltel.

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