Shares of satellite television providers gained Thursday, although a Citi Investment Research analyst said DirecTV Group Inc.'s strong first-quarter results may not be sustainable.
On Wednesday, DirecTV said first-quarter earnings jumped 10.4 percent as the company added a surprising number of new U.S. subscribers despite the slumping housing market.
DirecTV added 275,000 net U.S. subscribers, well above analyst expectations of about 180,000, and increased its domestic subscriber base by 5.2 percent.
"We question whether this pace of operating momentum is sustainable, particularly given increasing competition from cable and the saturation of the video product," said Citi analyst David Hamburger.
Hamburger does not expect Dish Network Corp. to match it's rival's growth spurt.
"Given the strength of the numbers already reported from DirecTV and the cable providers, we think that while Dish might show some sequential improvement in operating performance, we believe it will continue to lag its peers," the analyst said in a note to clients.
Dish shares gained 11 cents to $30.72 in afternoon trading. DirecTV shares rose 35 cents to $27.36.
Terms & Conditions
RSS Headlines
Fool UK