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Business

Apple, Amazon, McDonald’s Headline Busy Earnings Week

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Amazon.

com Inc.,

Apple Inc.

and

Meta Platforms Inc.

are among the tech heavyweights featured in a packed week of earnings that investors will probe for indicators about the broader economy.

Other tech companies scheduled to report their latest quarterly reports include Google parent company

Alphabet Inc.

and

Microsoft Corp.

Investors also will hear from airlines such as

Southwest Airlines Co.

and

JetBlue Airways Corp.

, automotive companies

General Motors Co.

and

Ford Motor Co.

, and energy giants

Chevron Corp.

and

Exxon

Mobil Corp.

Nearly a third of the S&P 500, or 161 companies, are slated to report earnings in the coming week, according to FactSet. Twelve bellwethers from the Dow Jones Industrial Average, including

Boeing Co.

and

McDonald’s

Corp., are expected to report as well.

The flurry of results from a broad set of companies will give a sense of how businesses are faring as they deal with inflation denting consumer spending, ongoing supply-chain challenges and a stronger dollar.

People awaited the release of Apple’s latest iPhones in New York last month. The company will report quarterly results on Thursday afternoon.



Photo:

ANDREW KELLY/REUTERS

One area holding up to the challenges has been travel. Several airline companies have reported that consumers still have an appetite to spend on trips and vacations. On Friday,

American Express Co.

raised its outlook for the year in part because of a surge in travel spending.

“We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year,” American Express Chief Executive

Stephen Squeri

said.

In addition to airlines reporting, companies such as car-rental company

Hertz Global Holdings Inc.

and lodging companies

Hilton Worldwide Holdings Inc.

and

Wyndham Hotels & Resorts Inc.

will offer reads into leisure spending.

Overall, earnings for the S&P 500 companies are on track to rise 1.5% this period compared with a year ago, while revenue is projected to grow 8.5%, FactSet said.

Other companies will serve as a gauge for how consumers have responded to higher prices and whether they have altered their spending as a result.

Coca-Cola Co.

and

Kimberly-Clark Corp.

on Tuesday and

Kraft Heinz Co.

on Wednesday will show how consumers are digesting higher prices.

Mattel Inc.,

set to report on Tuesday, will highlight whether demand for toys remains resilient. Rival

Hasbro Inc.

issued a warning ahead of the holiday season.

United Parcel Service Inc.

will release its results on Tuesday and provide an opportunity to show how it is faring ahead of the busy shipping season. The Atlanta-based carrier’s earnings come weeks after rival

FedEx Corp.

warned of a looming global recession and outlined plans to raise shipping rates across most of its services in January to contend with a global slowdown in business.

Results from credit-card companies

Visa Inc.

and

Mastercard Inc.

will offer insights into whether inflation has finally put a dent in consumer spending after both companies reported resilient numbers last quarter.

Wireless carrier

T-Mobile US Inc.’s

numbers on Thursday will give more context to mixed results from competitors

Verizon Communications Inc.

and

AT&T Inc.

AT&T

issued an upbeat outlook on Thursday after its core wireless business exceeded the company’s expectations, whereas Verizon on Friday said earnings tumbled as retail customers balked at recent price increases.

Other notable companies lined up to report include

Chipotle Mexican Grill Inc.

on Tuesday, chicken giant

Pilgrim’s Pride Corp.

on Wednesday and chip maker

Intel Corp.

on Thursday.

Write to Denny Jacob at denny.jacob@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

AT&T earnings were ‘actually good’ despite stock selloff, says analyst

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AT&T Inc.’s shares fell sharply Thursday after the telecommunications giant cut its free-cash-flow forecast for the year, but one analyst said the latest report wasn’t all bad.

In fact, LightShed Partners analyst Walt Piecyk titled his research note: “AT&T’s Q2 Was Actually Good. Here’s Why.”

Admittedly, AT&T’s
T,
-7.62%
management team didn’t win points from Piecyk for its handling of cash-flow forecasting over the past few months. Piecyk recalled flagging issues with AT&T’s older free-cash forecast back in March, namely a “liberal use of rounding, aversion to simply stating a cash tax estimate for presumably political reasons, and ultimately the use of working capital and DirecTV distributions in their free-cash-flow presentation.”

AT&T said Thursday that various trends contributed to the lowered forecast, including slower customer payment times and higher-than-expected cash expenses related to its own device purchases from suppliers.

“It’s startling that the stock would sell off this steeply on working capital, but management is largely to blame,” Piecyk wrote. “Free-cash-flow guidance should not be this complex and investors shouldn’t include ephemeral working capital benefits in their calculations.”

Elsewhere, however, he saw positives in the report. AT&T’s free-cash-flow metric is important to investors because the company pays a large dividend, but Piecyk doesn’t think that the company will need to cut its dividend any more.

“Its core business is performing well and the 5G capex cycle should be winding down,” he wrote. “In 2023, we believe AT&T can generate over $12 billion of free-cash flow. The full-year benefit of the dividend cut means that $12 billion covers ~$8.2 billion of expected dividend payments,” before taking into account working-capital impacts or about $3 billion in anticipated DirecTV distributions.

Piecyk also had an upbeat view on the company’s wireless performance, especially in light of investor debate about the company’s pricing and promotional strategies.

“The increased pricing on its rate plans did not spike churn and helped deliver post-paid phone ARPU [average revenue per user] growth for the first time in over two years,” he wrote. “This also sends a signal to the wireless industry that there is pricing power in this market.”

Piecyk sees additional room for the company to grow ARPU as the year progresses.

He acknowledged that “[i]nvestors are understandably concerned that AT&T is buying revenue growth with handset subsidies to both new and existing subscribers” but noted that the company was able to grow wireless earnings before interest, taxes, depreciation, and amortization (Ebitda) in the latest quarter. In addition, the company’s upgrade rate fell relative to a year earlier, suggesting that the upgrade cycle is stretching out.

While AT&T is feeling some pain in its business wireline business, Piecyk was impressed by the performance of the company’s fiber business, with net adds up 25% relative to a year before. “This further validates our industry assumptions of target market share for fiber overbuilders and the increased share that can be obtained in legacy markets,” he wrote.

Overall, Piecyk sees opportunities for AT&T moving forward, especially given what the latest numbers indicated about pricing actions. “We continue to believe wireless operators can increase price and cut costs,” he wrote, including through a potential curtailing of device subsidies.

Piecyk rates the stock a buy with a $26 target price.

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Business

Here is what AT&T is giving investors in WarnerMedia spinoff, and how it will work

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AT&T Inc. detailed its plans for the spinoff of WarnerMedia on Friday, with investors eventually expected to receive a share of the new streaming-media entity for every four AT&T shares they own.

AT&T
T,
+2.19%
is in the process of spinning off its WarnerMedia business in a combination with Discovery Inc.
DISCA,
+0.85%,
which executives have said would allow AT&T to refocus attention on core telecommunications efforts. The company expects the deal to close in April, and executives declared plans for a stock dividend to its investors for April 5 at the close of business.

AT&T explained in a Friday release that those who own AT&T shares as of the end of trading April 5 will be able to receive shares of WarnerMedia SpinCo representing 100% of AT&T’s interest in the business. After the transaction closes, expected sometime in April, investors will receive an estimated 0.24 shares of the newly created WarnerBros. Discovery for each share of AT&T they own.

See also: AT&T issues new guidance as WarnerMedia spin draws nearer

The shares created represent about 71% of WarnerBros. Discovery, which will trade under the ticker symbol “WBD” after the spinoff completes. Shareholders “do not need to take any action” as the SpinCo shares will be automatically exchanged on the date the transaction closes, the company reported.

The potential period between the stock dividend and the closing of the deal could create confusion for anyone who wants to buy or sell the stock. The company noted that between April 4, the trading day before the record date for its spinoff distribution, and the closing of the combination with Discovery, there will be two markets for AT&T’s common stock on the New York Stock Exchange.

Those who choose to sell a share of AT&T’s common stock through the “regular way” market will sell both the AT&T share and the right to receive WarnerBros. Discovery shares through the transaction. Those who participate in the “ex-distribution” market will be selling AT&T’s stock while keeping the right to receive WarnerBros. Discovery shares.

Additionally, in the two-way trading window, those who wish to keep AT&T shares while selling the right to receive WarnerBros. Discovery can use a temporary when-issued option that will be available on the Nasdaq.

While AT&T shareholders will still own the same number of AT&T shares after the transaction close that they did just before the transaction close, the company’s stock price is expected to adjust after the deal is complete, reflecting the spinoff.

AT&T’s board of directors also declared a second-quarter dividend of 27.75 cents a share, the first quarterly dividend under a reduced annual payout that executives outlined last month. The dividend will be payable on May 2 for shareholders of record as of April 14.

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Entertainment

‘Matrix’ Co-Producer Sues Warner Bros. Over HBO Max Streaming Release

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“The Matrix Resurrections” co-producer Village Roadshow Entertainment Group filed a lawsuit against Warner Bros., alleging the studio parent’s decision to release the movie simultaneously on HBO Max and in theaters was a breach of contract.

The suit, which was filed in Los Angeles Superior Court on Monday, is the latest indication of growing tensions between factions of the entertainment industry as major media companies give priority to direct-to-consumer streaming over traditional distribution platforms.

Warner Bros. parent WarnerMedia, a unit of

AT&T Inc.,

T -0.19%

put its entire 2021 slate of movies on its sister streaming service HBO Max at the same time as their theatrical release. The studio also moved the release date of “The Matrix Resurrections” to 2021 from 2022 in an effort to help HBO Max attract more subscribers, the lawsuit alleged.

“WB’s sole purpose in moving the release date of ‘The Matrix Resurrections’ forward was to create a desperately needed wave of year-end HBO Max premium subscriptions from what it knew would be a blockbuster film, despite knowing full well that it would decimate the film’s box office revenue and deprive Village Roadshow of any economic upside that WB and its affiliates would enjoy,” the suit said.

“The Matrix Resurrections” performed disappointingly at the box office, garnering only a fraction of the revenue generated by its predecessors.

Other films released during the pandemic performed well at the box office, including “Spider-Man: No Way Home,” which unlike “The Matrix Resurrections” wasn’t released on a streaming platform when it came out in theaters, the lawsuit said.

Keanu Reeves and Carrie-Anne Moss in the latest ‘Matrix’ movie.



Photo:

Warner Bros./Everett Collection

Moves by major media companies to give priority to their streaming services over other platforms have potentially significant financial implications for actors, producers and financial partners who fear that the push to streaming will come at their expense.

In July, actress Scarlett Johansson filed a lawsuit against

Walt Disney Co.

, alleging her contract to star in the Marvel movie “Black Widow” was breached when the media giant released the movie on its streaming service Disney+ at the same time as its theatrical launch.

Ms. Johansson, who argued her box office-based performance bonus was hurt by the Disney+ move, was seeking as much as $80 million in damages. Disney, which denied it violated her agreement, settled with Ms. Johansson in September.

In Monday’s lawsuit, Village Roadshow also alleges that Warner Bros. is attempting to cut the company out of future movies and TV shows based on characters or intellectual property that it has ownership stakes in. Village Roadshow said it has invested $4.5 billion in its more-than-two-decade partnership and co-financed many Warner Bros. hits including “Joker,” “American Sniper” and the “Matrix” franchise.

“WB has also been devising various schemes to deprive Village Roadshow of its continuing rights to co-own and co-invest in the derivative works from the films it co-owns,” the suit alleged.

In response to the lawsuit, a spokeswoman for Warner Bros. said: “This is a frivolous attempt by Village Roadshow to avoid their contractual commitment to participate in the arbitration that we commenced against them last week. We have no doubt that this case will be resolved in our favor.”

The partnership between the two companies does contain an arbitration clause to resolve disputes, but Village Roadshow said in the suit that it doesn’t apply in this case.

“Instead, the parties’ contracts expressly allow Village Roadshow to bring any action for injunctive or non-monetary relief in this Court, as they agreed that the arbitration agreement `shall not prevent any party from seeking injunctive relief and other forms of non-monetary relief in the state or federal courts located in Los Angeles County, California,’” the suit said.

The suit comes just weeks before AT&T is expected to close on its deal to combine the WarnerMedia assets with

Discovery Inc.

and create a new company dubbed Warner Bros. Discovery.

Village Roadshow has also been exploring strategic options including taking on investments or even selling itself, The Wall Street Journal previously reported.

Bradley Cooper starred in the 2014 movie ‘American Sniper,’ which Village Roadshow co-financed.



Photo:

Warner Bros./Everett Collection

When Warner Bros. unveiled its strategy to put its 2021 movie slate on HBO Max and in theaters, it said it was doing so both to boost the new streaming service and as a counterbalance the effects the Covid-19 pandemic had on the theatrical industry.

The studio earned the wrath of Hollywood producers and stars by not alerting them to the decision in advance. Many feared they would be shortchanged by the move and were openly critical of the studio.

Warner Bros. ended up cutting new deals with much of the talent involved in its 2021 slate, which cost the studio more than $200 million, the Journal previously reported.

No deal regarding “The Matrix Resurrections” was reached, and Village Roadshow said in its suit that not only was the box office for the movie cannibalized but that it was also a victim of “rampant piracy” that Warner Bros. “knew would come by distributing this marquee picture on a streaming platform on the same day as its theatrical release.”

Piracy has been on the rise since more films have been released on streaming platforms, according to firms that track such data. Theater owners have also been vocal about their concerns of increased piracy due to the streaming first strategy.

The issue over the release of “The Matrix Resurrections,” isn’t the only significant crack in Village Roadshow’s 25-year partnership with Warner Bros. It also claimed Warner Bros. is violating Village Roadshow’s rights to participate in projects derived from movies it co-produced.

Village Roadshow co-financed the 2019 film ‘Joker,’ starring Joaquin Phoenix.



Photo:

Niko Tavernise/Warner Bros./Everett Collection

Village Roadshow said Warner Bros. tried to force it to give up its rights in a TV series based on the movie “Edge of Tomorrow,” which it co-financed and co-produced.

“When Village Roadshow refused, WB said the quiet part out loud: it will not allow Village Roadshow to benefit from any of its Derivative Rights going forward, despite the over $4.5 billion it has paid WB to make and distribute 91 films. In other words, if Village Roadshow won’t give up its rights, WB will make sure they are worth nothing,” the suit said.

“Warner Bros. has a fiduciary duty to account to Village Roadshow for all earnings from the exploitation of the films’ copyrights, not just those it can’t hide through sweetheart deals to benefit HBO Max,” said Mark Holscher, a Kirkland & Ellis litigation partner who represents Village Roadshow.

Village Roadshow also said under its agreement with Warner Bros. it should have the option to partner in “Wonka,” a prequel to “Charlie and the Chocolate Factory” that it co-produced.

Write to Joe Flint at joe.flint@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

WarnerMedia and ViacomCBS Are Exploring Possible Sale of CW Network

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AT&T Inc.’s

T 2.22%

WarnerMedia and

ViacomCBS Inc.

VIAC -1.00%

are exploring a possible sale of a significant stake or all of the CW Network, which they jointly own, according to people familiar with the matter.

Among the suitors is

Nexstar Media Group Inc.,

NXST -1.86%

the nation’s biggest broadcaster and a large owner of affiliates of the network, the people close to the talks said. The CW Network caters primarily to teens and young adults.

People close to the talks said they are far along and an agreement could be reached soon, though the talks could still fall apart. There are other interested parties as well, but the discussions with Nexstar are most advanced, they said.

The most prevalent scenario is Nexstar’s taking a controlling stake in the CW, with CBS and WarnerMedia remaining as minority owners and receiving commitments to be the primary program suppliers for the network, the people said.

CBS and WarnerMedia have been exploring strategic options for the CW Network for several months, some of the people involved in the talks said. The network isn’t profitable as a stand-alone broadcast entity, but the content produced for it is a valuable asset for other platforms at the parent companies.

Warner Bros., which produces some of the CW’s biggest shows, including “Riverdale,” has generated significant revenue selling the shows to

Netflix Inc.

over the years. Other popular shows on the CW include “All American” and “The Flash.”

Popular CBS-produced shows for the CW include “Walker,” based on intellectual property from the TV show “Walker Texas Ranger.”

With the launch of HBO Max, the WarnerMedia-owned direct-to-consumer streaming service, the CW shows made from Warner Bros. in the future will be funneled there.

AT&T is in the process of merging its WarnerMedia entertainment assets, which also include the cable networks TNT, TBS and CNN, with programming behemoth

Discovery Inc.

to create a separate company. The deal is expected to close in the spring.

For Nexstar, a controlling stake in the CW would represent a significant step in its content aspirations. It already has been investing heavily in a national cable news service called NewsNation.

ViacomCBS and WarnerMedia have been longtime partners in the CW Network since the merger of the UPN and WB networks in 2006.

Write to Joe Flint at joe.flint@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 6, 2022, print edition as ‘Warner, CBS Look To Sell CW Unit.’

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Business

AT&T Shed Media Assets in 2021. This Year It Wants to Add Investors.

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AT&T Inc.

T 0.83%

faces a busy year as it tries to complete a divorce with its entertainment business, ease investor concerns about its dividend and show that it can continue to woo new wireless customers.

The Dallas conglomerate spent much of 2021 on what amounted to a gut remodel. It kicked off a series of big divestitures spanning pay TV, media production and advertising, moves aimed at refocusing AT&T on more predictable growth opportunities from profit centers such as wireless and broadband service.

Wall Street analysts broadly welcomed the changes. The stock price didn’t reflect a similar embrace by investors.

AT&T’s shares slumped 14% in 2021 and briefly touched 12-year lows in December before recovering. The selloff has pushed its dividend yield—a ratio reflecting the cash a company pays its shareholders divided by its stock price—above 8%. The S&P 500 gained 27% in 2021.

Chief Executive Officer

John Stankey

in June called the period “a hard year that’s been full of anxiety.” By December, he said he hoped that within another year “our attention will be entirely on the future and not on what we needed to do to reposition or restructure the business.”

On Wednesday, AT&T said its core wireless unit added about 880,000 postpaid phones in the fourth quarter, topping the 800,000-phone gain in the same period of 2020. The company’s WarnerMedia unit ended 2021 with 73.8 million global HBO subscribers, ahead of its 70 million to 73 million target.

AT&T in May announced plans to spin off WarnerMedia, the entertainment empire it acquired in 2018, into a new joint venture with Discovery Inc. The transaction secured European competition authorities’ approval in December but is still under review in the U.S. and other countries.

AT&T shareholders will keep a 71% stake in the new media creation, so the company’s stock price partly reflects how the market values that future media business, which will be called Warner Bros. Discovery.

The telecom company that remains is expected to pay shareholders a lower annual dividend. Executives have said the yearly payout will fall from about $15 billion to between $8 billion and $9 billion after the media spinoff closes. An AT&T spokesman pointed to executives who have said that amount will still make it one of the top-yielding companies among dividend payers.

David Jeffress,

portfolio manager at Laffer Tengler Investments, said his firm had owned AT&T shares but sold them in early 2021. He cited the dividend reduction among his concerns.

“Once you’ve cut your dividend, and that level of uncertainty is incorporated, it’s really hard to kind of regain the confidence of a dividend investor,” he said. “We may re-enter it at some point in the future, but really we’d want to see the dust settle.”

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Can AT&T find success by returning to a focus on phone and internet? Why or why not? Join the conversation below.

A second factor depressing AT&T’s shares has also punished its close rivals. Shares of

T-Mobile US Inc.

and

Verizon Communications Inc.

sank nearly as much as AT&T’s in 2021, as all three carriers offered deep discounts to keep and attract customers.

Those discounts, coupled with a surge of federal government subsidies tied to the coronavirus pandemic, helped cellphone carriers post unusually strong growth. The top three operators gained nearly 5 million postpaid phone connections—a closely watched metric—over the nine months that ended in September.

The subscriber surge prompted some market watchers to question how long the good times can last.

Jeff Moore,

a wireless-industry analyst for Wave7 Research, likened such explosive growth to all 32 NFL teams winning the same Super Bowl.

“It just doesn’t make sense,” he said. “You would think that someone is losing and someone else is gaining.”

“‘Once you’ve cut your dividend, and that level of uncertainty is incorporated, it’s really hard to kind of regain the confidence of a dividend investor.’”


— David Jeffress, portfolio manager at Laffer Tengler Investments

AT&T’s rivals have pointed the finger at its now year-old marketing blitz, which offered deep smartphone discounts for new and existing customers, as the start of a race to the bottom that could eventually hurt industry profitability.

AT&T’s leaders have said their wireless customer growth is durable. They have cited smarter marketing and improving traction in the public-safety market, as well as discounts, among the factors helping their results.

Mr. Moore agreed and said Verizon is the most vulnerable to slumping customer growth this year because its retail marketing operation has lost ground to more aggressive rivals. A Verizon spokesman declined to comment.

“There’s too much skepticism about AT&T,” the analyst said. “They’ve really turned around their results.”

Some shareholders weren’t willing to wait.

Jerry Braakman,

chief investment officer at First American Trust, said his firm held AT&T shares in client portfolios for several years before selling them in December 2020. He said the pandemic’s reordering of the winners and losers in the film industry kept AT&T’s WarnerMedia unit from delivering on its promise.

“AT&T looked like their strategy was struggling, so we decided not to continue to ride something down,” he said. “Sometimes you have to cut your losses and move on.”

John Stankey talks about AT&T’s future as a streaming service and how its theatrical distribution has been affected by the pandemic with WSJ editor in chief Matt Murray at the WSJ Tech Live 2020. Photo: John Lamparski/Getty Images (Video from 10/19/2020)

Other investors are looking to profit from the pessimism.

Ryan Kelley,

chief investment officer and portfolio manager at Hennessy Funds, said his firm still owns AT&T shares in a value-style fund that focuses on stocks with high dividend yields.

“With the dividend being what it is and with analysts becoming more comfortable with where they are now, we’re hoping for better returns here forward,” he said. “Hopefully most of the downside has already been priced into the stock.”

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Karen Langley at karen.langley@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

AT&T, Verizon Refuse FAA Request to Delay 5G Launch

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AT&T Inc.

T -0.73%

and

Verizon Communications Inc.

VZ -0.56%

rebuffed a request from federal transportation officials to delay the launch of new 5G wireless services but offered a counterproposal that would allow limited deployments to move forward this week.

The cellphone carriers said Sunday in a letter reviewed by The Wall Street Journal that they could further dim the power of their new 5G service for six months to match limits imposed by regulators in France, giving U.S. authorities more time to study more powerful signals’ effect on air traffic. The plan from the companies, which have said they plan to start service Wednesday, could prolong a standoff between the telecom and aviation industries over how to proceed.

“If U.S. airlines are permitted to operate flights every day in France, then the same operating conditions should allow them to do so in the United States,” the chief executives wrote in the letter.

Telecom-industry officials have pointed to dozens of countries, including France, that have already allowed cellular service over the frequencies in question, known as C-band. France is among the countries that have imposed wireless limits near airports while regulators study their effect on aircraft.

The message from AT&T CEO

John Stankey

and Verizon CEO

Hans Vestberg

was in response to a letter Transportation Secretary

Pete Buttigieg

and Federal Aviation Administration chief

Steve Dickson

sent late Friday. The New Year’s Eve missive asked the carriers to postpone their planned 5G launch by “no more than two weeks” while officials worked to address the wireless services’ effect on specific airports on a rolling basis over the coming weeks.

The FAA said it was reviewing the wireless companies’ letter. “U.S. aviation safety standards will guide our next actions,” the FAA said. Representatives from the Transportation Department, the FAA’s parent agency, didn’t immediately respond to requests for comment on Sunday.

Air-safety regulators have said the new cellular services could confuse key cockpit safety systems and have been preparing to impose potentially disruptive flight restrictions.

AT&T and Verizon disputed claims of any air-safety risk, though the companies already postponed a planned December debut of the new signals to provide more time for telecom and aviation regulators to share information about the wireless infrastructure and aircraft equipment in question.

The Sunday letter from telecom CEOs said transportation regulators’ latest delay request would be to “the detriment of millions of our consumer, business and government customers,” noting that carriers spent more than $80 billion to acquire the licenses in a Federal Communications Commission auction that closed in January 2021.

FCC authorities padded the spectrum they auctioned with a swath of buffer frequencies to prevent interference with cockpit systems. But air-safety regulators have expressed concern that more sensitive altimeters that pick up signals well beyond their defined range could mistake cellular transmissions for terrain. The devices feed data to commonly used cockpit systems that help planes automatically land in bad weather, prevent crashes and avoid midair collisions.

AT&T and Verizon have spent the past year preparing to turn on new signals to provide new fifth-generation wireless technology, a faster and more capable mobile service. Wireless companies in other countries already use similar frequencies, but the spectrum wasn’t available to U.S. providers until recently because of existing satellite users that had to be moved into a narrower band of spectrum before 5G service could begin.

Without a resolution to the aviation-telecom dispute, Messrs. Buttigieg and Dickson warned the FAA’s flight limits would bring severe economic consequences.

“Failure to reach a solution by Jan. 5 will force the U.S. aviation sector to take steps to protect the safety of the traveling public, particularly during periods of low visibility or inclement weather,” they wrote in their Dec. 31 letter.

Airlines have been bracing for significant flight cancellations and diversions due to potential FAA flight restrictions because of the regulator’s aviation-safety concerns. Pilots and airlines had been awaiting details of potential FAA flight restrictions that limit the use of systems that rely on radar altimeters. Aviation industry officials have most recently expected the agency to detail flight limits as soon as Monday.

Over the past week, U.S. air travel has been snarled by a mix of winter storms and staffing challenges because of increasing ranks of airline crews calling in sick with Covid-19 as the U.S. deals with a surge by the Omicron variant. Thousands of flights have been canceled and delayed.

5G and Air Traffic

More WSJ coverage on the debate over wireless frequencies and aviation, selected by the editors.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Science

Just Look at These Stunning Photos of Jupiter’s Giant Storms

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The latest images from the Juno mission at Jupiter include views of giant storms and vortexes on the gas giant world in amazing detail.

A new batch of images recently arrived at Earth from JunoCam, the visible light camera onboard the Juno spacecraft. The camera has provided stunning views of Jupiter since the spacecraft’s arrival in 2016.

 

Citizen scientists and imaging enthusiasts act as the camera’s virtual imaging team, participating in key steps of the process by making suggestions of areas on Jupiter to take pictures and doing the image editing work.

This lead image, edited by Kevin Gill, provides a 3-D-like view of a giant storm. How big are these swirling masses? The SETI Institute weighs in:

You can find all the raw data plus a gallery of processed images from people all around the world at the JunoCam website. Kevin Gill is one of our favorite image editing gurus, and so we feature his Juno images regularly. He also posts on Twitter, and has a Flickr gallery of the work he’s done with data from Juno, the Mars rovers, and more, including his personal astrophotography and landscape images.

But wait, there’s more! Juno’s latest close pass by Jupiter, Perijove 38, includes a view of the planet’s northern hemisphere, and here’s a view from another of our favorite image editors, Andrea Luck:

Juno also took a look at Jupiter’s moon Io during this pass:

During its time in orbit, Juno has made discoveries about Jupiter’s interior structure, magnetic field, and magnetosphere, and has found its atmospheric dynamics to be far more complex than scientists previously thought.

Find out more about the Juno mission here.

This article was originally published by Universe Today. Read the original article.

 



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Business

AT&T Books $15.5 Billion Charge on DirecTV Unit

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AT&T Inc. booked a $15.5 billion charge on its pay-television business, reflecting the damage cord-cutting has taken on its DirecTV satellite unit even as the company’s HBO Max streaming service’s growth ramped up.

The write-down created a fourth-quarter loss as the media-and-telecommunications giant weighs the potential sale of its pay-TV assets and executives focus their investments on newer technologies. The company reported quarterly revenue declines in its legacy-video and WarnerMedia units, offsetting gains in its core wireless-phone division.

Executives called the noncash accounting charge a sign of the pay-TV unit’s aging status as the Dallas company promotes an internet-streaming model that gives its content-production business a direct line to viewers.

“Our biggest and single-most important bet is HBO Max,” Chief Executive John Stankey said on a conference call Wednesday. Executives plan to expand the service’s footprint in other countries this year and launch an advertising-supported version in the second quarter.

Overall, AT&T reported a fourth-quarter loss of $13.89 billion, or $1.95 a share, compared with a profit of $2.39 billion, or 33 cents a share, a year earlier. Revenue fell 2.4% to $45.7 billion.

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Business

GameStop, Microsoft, AMC: What to Watch When the Stock Market Opens Today

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Here’s what we’re watching ahead of Wednesday’s opening bell.

—U.S. stock futures slipped, as investors awaited a bumper day of major earnings reports and a meeting of the Federal Reserve.

S&P 500 futures were down 1.1%, while futures tied to the technology-heavy Nasdaq-100 edged down 0.7%. Dow Jones Industrial Average futures fell 1.1%.

What’s Coming Up

—Earnings updates expected:

Tesla,

TSLA -0.71%

Apple

AAPL -0.22%

and

Facebook

FB -2.39%

are due after the close. The electric-car maker is expected to record its first full-year profit.

The Federal Reserve releases a policy statement at 2 p.m. and Chairman Jerome Powell holds a press conference at 2:30 p.m.

Market Movers to Watch

—And then there’s GameStop. Its stock popped again ahead of the bell, soaring 73% in wildly volatile trading. CNBC reported that Melvin Capital, a hedge fund that has posted big losses so far this year in part because of a wager against the videogame retailer’s stock, had closed out its short position on Tuesday afternoon. The report caused a stir on the online platform Reddit—popular among day traders waging a battle against hedge-fund short-sellers—where some members wrote that it was an attempt to pull

GameStop

GME 109.79%

‘s share price back down. And

Elon Musk

weighed in on the stock again last night with a tweet, “Gamestonk!!“

—The show must go on: Another heavily shorted stock, movie-theater operator

AMC Entertainment Holdings,

AMC 133.87%

saw its shares vault more than 350% higher premarket.

—Headphone maker

Koss

KOSS 72.20%

has also joined the party, and its shares jumped 109% premarket.

—

Bed Bath & Beyond

BBBY 28.21%

resumed its upward trajectory, up 20% ahead of the bell. Online traders point to an early 2020 change in management and the fact that the company is buying back shares as signs that the share price will continue to increase.

—

Microsoft

MSFT 1.44%

shares are up 2.1% premarket. The software giant’s profit and sales jumped, propelled by pandemic-fueled demand for videogaming and accelerated adoption of its cloud-computing services.

—

Boeing

BA -4.46%

shares fell 3.3% premarket after the plane maker reported its biggest-ever annual loss and took a huge financial hit on its new 777X jetliner, reflecting the pandemic’s worsening toll.

—

Abbott Laboratories

ABT 1.12%

shares added 1.5% premarket after it logged hearty profit growth in the latest quarter as a surge in demand for its Covid-19 diagnostics services contributed to higher revenue.

—

Starbucks

SBUX -5.30%

slipped 3% premarket after the coffee chain reported that sales fell during the holiday quarter but showed signs of recovery, particularly in China. Its operating chief

Roz Brewer

is leaving to become CEO of

Walgreens

WBA 6.21%

Boots Alliance, where she’ll be the only Black woman leading a Fortune 500 company. Walgreens shares climbed 5%.

A Walgreens store in Tomball, Texas, Jan. 16, 2021.



Photo:

Jeff Lautenberger for The Wall Street Journal

—

AT&T

T -1.11%

shares slipped 1.3% premarket after it reported a fourth-quarter loss as it booked a $15.5 billion charge on its pay-TV business.

—Chip maker

Texas Instruments

TXN -2.81%

‘s shares slipped 1.7% premarket even though quarterly results and outlook both topped Wall Street estimates after Tuesday’s close.

Market Fact

Retail order flows have reached 20% of the U.S. stock market’s total, according to

UBS

research, twice what they were in 2010.

Chart of the Day

GameStop shares have become a favorite of online traders who are seeking to make money from buying options.

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