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    Beyond Meat reports narrow-than-expected quarterly loss despite sinking sales

    Beyond Meat reported a narrower-than-expected loss and stronger sales than Wall Street anticipated for its fourth quarter.
    However, the company’s sales still sank more than 20% and are expected to keep falling in 2023.
    Beyond is prioritizing becoming cash-flow positive above growing sales of its meat alternatives.

    Vegetarian sausages from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California, June 5, 2019.
    Mike Blake | Reuters

    Beyond Meat on Thursday reported a narrower-than-expected loss for its fourth quarter, despite its sales sinking more than 20%.
    Shares of the company climbed 14% in after-hours trading.

    Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

    Net loss per share: $1.05 vs. $1.18 expected
    Revenue: $79.9 million vs. $75.7 million expected

    For the fourth quarter, Beyond reported a net loss of $66.9 million, or $1.05 per share, narrower than a net loss of $80.4 million, or $1.27 per share, a year earlier.
    CEO Ethan Brown said the company’s margins improved by 14 percentage points, helped by slimming down its co-manufacturing footprint and better management of production staffing levels.
    Net sales dropped 20.6% to $79.9 million. Beyond said the total pounds of meat substitutes it sold fell 16.9% in the quarter.
    The company said demand for meat alternatives across “all channels” is still soft. In response, it has offered its products at discounts to entice customers hampered by persistent high inflation. Beyond’s net revenue per pound fell 4.4% in the quarter.

    U.S. sales fell 20.9% as the company saw weaker demand in both its grocery and food service segments. Likewise, outside the U.S., Beyond reported a 19.9% drop in revenue, fueled by a steeper decline in grocery sales.
    And the company is forecasting its sales will continue to shrink this year.
    Beyond is projecting its 2023 revenue will range from $375 million to $415 million, representing a drop of 1% to 10% in sales. Wall Street was expecting a wider range from $322 million to $496 million.
    Rather than growing sales, Beyond’s primary business goal is to become cash-flow positive in the second half of 2023. Its gross margins are expected to be in the low double digits and increase sequentially throughout the year.
    Beyond and the broader meat-alternative category have been struggling for more than a year and a half after seeing demand soar early in the pandemic. Customers who tried the expensive meat substitutes didn’t stick with the products, particularly as inflation pushed grocery prices higher.
    “We believe persistently high inflation, the slowing economy, increased competition and trading-down behavior by consumers among proteins are all negatively impacting growth for our category and our brand, but we do believe this is transitory,” Chief Financial Officer Lubi Kutua said on the company’s conference call on Thursday.
    In response, Beyond has pivoted from its initial strategy of “growth above all,” according to Brown, to focus on preserving cash, reducing inventory and aiming for profitability.
    Last year, it completed two rounds of layoffs, cutting more than a fifth of its workforce. The company also plans to restructure operating activities for Beyond Jerky, which is part of its joint venture with PepsiCo.
    Others in the plant-based meat category have had to make similar decisions as demand has dried up. Impossible Foods is reportedly cutting 20% of its staff after laying off 6% of workers last year. Elsewhere, Kellogg scrapped its plans to spin off and potentially sell its plant-based unit, which includes Morningstar Farms.

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    Boeing pauses delivery of 787 Dreamliners over fuselage issue

    Boeing temporarily halted delivery of its 787 Dreamliners over a fuselage issue, the Federal Aviation Administration said.
    The stoppage is the latest issue for the plane.
    “Deliveries will not resume until the FAA is satisfied that the issue has been addressed,” the agency said.

    The exterior of a 787 Dreamliner at the Boeing manufacturing facility in North Charleston, on December 13, 2022. 
    Logan Cyrus | AFP | Getty Images

    Boeing has temporarily halted deliveries of its 787 Dreamliners so it can do additional analysis on a fuselage component, the company and the Federal Aviation Administration said Thursday.
    “In reviewing certification records, Boeing discovered an analysis error by our supplier related to the 787 forward pressure bulkhead. We notified the FAA and have paused 787 deliveries while we complete the required analysis and documentation,” Boeing said in a statement.

    The company won’t be able to resume deliveries until it can show the FAA it has resolved the issue, but production will continue and Boeing doesn’t expect the issue to require additional work on the 787s.
    “There is no immediate safety of flight concern for the in-service fleet,” the company said. “We are communicating with our customers and will continue to follow the lead of the FAA. While near-term deliveries will be impacted, at this time we do not anticipate a change to our production and delivery outlook for the year,.”
    Shares of the company fell 3% in off-hours trading.
    The planes, which are often used for long-haul international routes, have suffered several issues for several years. This is not the first time that deliveries were halted.

    In May 2021, Boeing halted deliveries of the wide-body planes for the second time in less than a year after the FAA determined there were issues with the manufacturer’s method for evaluating the aircraft. The FAA said previously the issues were related to problems with incorrect spacing in some parts of the 787 aircraft, including the fuselage, which Boeing acknowledged was a problem in 2020, sparking a five-month stop on deliveries.

    In August 2022, it delivered its first 787 Dreamliner since the latest delivery pause to American Airlines, marking a milestone for the company because the bulk of the aircraft’s price is paid when it’s handed over to customers.
    A few months later, United Airlines ordered 100 787 Dreamliners, with the option to buy 100 more, to replace some of its older stock.
    The order was a major boost for Boeing, and the planes were slated to be delivered between 2024 and 2032, United said previously.
    United’s CEO Scott Kirby has said it was easier to buy more Boeing 787s over rival Airbus’s competing A350 wide-body plane.
    “In this world where we’re trying to bring on 2,500 pilots a year and grow the airline, introducing a new fleet type slows that down dramatically,” he said on a call with reporters. “And the truth is the 787 is a better replacement for the [767] because it’s smaller.”
    –CNBC’s Phil LeBeau and Leslie Josephs contributed to this report.

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    Warner Bros Discovery revenue misses as media giant posts big loss

    Warner Bros. Discovery reported fourth quarter revenue that missed analysts’ estimates as the media industry contends with a soft advertising market. 
    The company, which owns streaming services HBO Max and Discovery+, said its global direct-to-consumer streaming subscriber base increased by 1.1 million during the quarter.
    More “Lord of the Rings” movies are on the way, CEO David Zaslav said.

    Pedestrians walk past a street commercial advertisement billboard from Warner Bros and DC comics character, The Batman, movie in Madrid.
    Miguel Candela | SOPA Images | Lightrocket | Getty Images

    Warner Bros. Discovery on Thursday posted a large loss and recorded about $11.1 billion in fourth quarter revenue, missing analysts’ estimates, as the media industry contends with a soft advertising market. 
    The company’s TV networks segment – which includes cable-TV channels like TNT, TBS and Discovery – decreased 6% to roughly $5.5 billion, as advertising revenue took a drop in particular.

    Here’s what the company reported, vs. what analysts’ estimates, according to Refinitiv:

    Revenue: $11.01 billion vs. $11.36 billion expected
    Loss per share: 86 cents vs. 21 cents expected

    The company reported a loss of $2.1 billion for the period, or 86 cents per share. Warner Bros. Discovery shares fell after hours.
    Warner Bros. Discovery executives began warning of a worsening advertising market last summer, and other media companies, including Paramount Global, have seen it weigh on their earnings. Underlying advertising trends continued to soften in the fourth quarter and were exacerbated by audience declines, Warner Bros. Discovery CFO Gunnar Wiedenfels said on Thursday’s earnings call.
    While Zaslav said Thursday it is a “very challenging” macroeconomic environment, he forecast an improvement later this year. “We are assuming things will get better in the second half,” Zaslav said.
    The company has also been contending with restructuring costs and impairment charges stemming from the 2022 merger of Warner Bros. and Discovery, while trying to push its streaming business toward profitability. 

    The company ended the fourth quarter with $45.5 billion in debt on its balance sheet, and $3.9 billion in cash on hand. A major focus for Warner Bros. Discovery has been reducing its hefty debt load and cutting costs.
    Warner Bros. executives said Thursday they expected to continue significantly cutting debt from its balance sheet in the next two years. During the fourth quarter, the company repaid $1 billion in debt, and has repaid $7 billion since April, when the merger closed.
    “With the major restructuring decisions behind us, this year we are focused on building and growing our businesses for the future, and we’re off to a great start,” CEO David Zaslav said in the company’s earnings release Thursday. 
    The company, which owns streaming services HBO Max and Discovery+, said its global direct-to-consumer streaming subscriber base increased by 1.1 million to 96.1 million by the end of the quarter. 
    Revenue for the streaming segment was up 6%, the company said Thursday, driven by an uptick in subscriber growth for its ad-supported tiers.
    Losses for its streaming segment narrowed, the company said. It posted a loss of $217 million for the period, “a $511 million year-over-year improvement,” it added. 
    In the spring, the company will launch its combined streaming offering, with a walk through for investors planned on April 12. The merged platform is set to be named Max, CNBC previously reported.
    Earlier this month, the company hiked the monthly price of ad-free HBO Max by $1 to $15.99, the first price hike since the streamer’s launch in May 2020. The company said it would invest further in content and user experience.
    Zaslav said Thursday that while plans to combine Discovery+ and HBO Max content on one platform move forward, Discovery+ will also remain as a standalone streaming service. “We have profitable subscribers that are very happy with the offering of Discovery+, why would we shut that off?” Zaslav said.
    Warner Bros. Discovery reported continued softness in the advertising market, which has been weighing on its revenue since last summer, when executives first warned of a slowdown in ad spending. Last week, Paramount Global reported a decrease in quarterly revenue due to lower ad spending.
    The company’s network TV segment was particularly affected as major sporting events including college football and the men’s World Cup took place on other networks during the fourth quarter.
    Meanwhile, the company saw a 23% drop in revenue for its studios segment, noting it had lower TV licensing deals and fewer theatrical releases. The DC Comics film “Black Adam” was released in the fourth quarter last year, compared with multiple releases including “Dune,” “The Matrix Resurrections,” “King Richard” and “The Many Saints of Newark” in the same period during the previous year.
    On Thursday, Zaslav announced Warner Bros. Discovery signed a deal to make multiple “Lord of the Rings” films, as the media company leans into its franchises.

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    Alec Baldwin pleads not guilty to ‘Rust’ involuntary manslaughter, can continue filming amid criminal case

    Alec Baldwin pleaded not guilty to charges of involuntary manslaughter for his role in the fatal “Rust” shooting.
    A New Mexico judge said Baldwin could continue filming the movie with restrictions on how he interacts with witnesses in the criminal case.
    The “Rust” film is due to resume filming this spring.

    Actor Alec Baldwin departs his home, as he will be charged with involuntary manslaughter for the fatal shooting of cinematographer Halyna Hutchins on the set of the movie “Rust”, in New York, January 31, 2023.
    David Dee Delgado | Reuters

    Alec Baldwin pleaded not guilty to charges of involuntary manslaughter for his role in the fatal shooting on the set of the movie “Rust,” which will continuing filming under conditions set by a New Mexico judge on Thursday.
    Baldwin will be allowed to “have contact with potential witnesses” only as it relates to his completion and promotion of the movie, said Judge Mary Marlowe Sommer in a court filing.

    Though he is allowed to work with those witnesses, Baldwin is barred from discussing with them “the accident at issue” or “the substance of his or the witnesses’ potential testimony in the case.” He is not allowed to interact with witnesses in any capacity that goes beyond his work on the movie.
    The film’s producers announced last week they would continue filming this spring. Baldwin is also a producer in addition to starring in “Rust.”
    Along with the criminal suit, the Academy Award-winning actor is facing a civil lawsuit from the family of Halyna Hutchins, the cinematographer who was shot on set.
    Baldwin is allowed to talk about the accident with the witnesses who are named as co-defendants in the civil case as long as attorneys are present, Sommer set out in the same filing.
    The judge’s decision came on the same day Baldwin filed a waiver of his first appearance in court, which was scheduled for Friday. Sommer approved the waiver with a series of conditions including that Baldwin cannot possess firearms or consume alcohol and that he must obey the restrictions of witness interaction while he makes the movie.

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    Nikola’s fourth-quarter revenue falls short as it delivers just 20 trucks

    Nikola said Thursday it produced 133 battery-electric trucks in the fourth quarter, but delivered just 20 to dealers.
    The electric heavy-truck maker generated revenue that fell well short of Wall Street’s expectations.
    Nikola said it made a series of changes to its battery-electric truck during the quarter in response to feedback from early customers.

    Nikola Motor Company
    Source: Nikola Motor Company

    Electric heavy-truck maker Nikola said Thursday it produced 133 battery-electric trucks in the fourth quarter, but delivered just 20 to dealers, generating revenue that fell well short of Wall Street’s expectations.
    Nikola said it made a series of changes to its battery-electric truck during the quarter in response to feedback from early customers. The company also confirmed that the fuel-cell version of its truck is still on track to begin production in the second half of 2023, in line with earlier guidance.

    The stock fell more than 5% Thursday.
    Here are the key numbers from Nikola’s fourth-quarter earnings report, compared with Refinitiv consensus estimates:

    Adjusted loss per share: 37 cents vs. 43 cents expected
    Revenue: $6.6 million vs. $32.1 million expected

    Nikola’s fourth-quarter net loss was $222.1 million, or 46 cents per share. The truck maker lost $159.4 million, or 39 cents per share on a GAAP basis, in the year-ago period.
    As of Dec. 31, Nikola had $233.4 million in cash and equivalents available, down from $315.7 million at the end of September.
    Nikola’s fourth-quarter production brought it to 258 trucks built in 2022. That was just enough to hit the guidance range it provided in November, when it said it expected to produce between 255 and 305 trucks for the full year.

    Production should ramp up somewhat in 2023. Nikola said investors should expect it to deliver between 250 and 350 battery-electric trucks and 125 to 150 of its upcoming fuel-cell trucks this year. The company also expects to reduce costs on its battery-electric trucks by about $105,000 per truck by year-end as it realizes savings from its acquisition of battery-pack maker Romeo Power.
    This is breaking news. Please check back for updates.

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    Lordstown halts production, shipments of Endurance electric trucks to address quality issues

    Lordstown Motors said Thursday it will suspend production and deliveries of its all-electric Endurance pickup to address performance and quality issues with certain components.
    The automaker also will voluntarily recall 19 Endurance pickups to address a “specific electrical connection issue that could result in a loss of propulsion while driving.”
    Shares of Lordstown were down in early trading Thursday.

    Lordstown Motors gave rides in prototypes of its upcoming electric Endurance pickup truck on June 21, 2021 as part of its “Lordstown Week” event.
    Michael Wayland / CNBC

    Lordstown Motors said Thursday it will suspend production and deliveries of its all-electric Endurance pickup to address performance and quality issues with certain components.
    The electric vehicle startup, which partnered with Foxconn for vehicle production at an Ohio plant, said the team is working with suppliers on the root cause analysis of each issue and potential solutions, which “in some cases may include part design modifications, retrofits, and software updates.”

    The automaker also will voluntarily recall 19 Endurance pickups to address a “specific electrical connection issue that could result in a loss of propulsion while driving.” Lordstown said it is working with suppliers to implement a solution that the company believes will address the issue.
    Shares of Lordstown, which went public via a special purpose acquisition company in 2020, fell 11% to $1.09 on Thursday. It’s a far cry from the stock’s all-time high of $31.80 a share in September 2020.
    Colleen Robar, a spokeswoman for Lordstown, said the company is unaware of any injuries associated with the recalled vehicles. She declined to disclose how many vehicles in total the company has produced and delivered to customers since production started in September.
    As of Jan. 3, the company had produced 31 vehicles for sale and delivered six of those to customers, Lordstown said in a regulatory filing last month.
    Robar confirmed the problems have not resulted in any fires, like a battery issue earlier this month with an electric Ford F-150 Lightning pickup.

    “While our experienced team has made significant progress in addressing the underlying component and vehicle sub-system issues affecting the Endurance build schedule, we remain committed to doing the right thing by our customers and to resolve potential issues before resuming production and customer shipments,” said Lordstown CEO Edward Hightower said in a release.
    The company declined to forecast how long production will be idled at the Ohio plant, which Lordstown purchased from General Motors in 2019.
    The company plans to provide a more detailed update on the status of these issues on its upcoming earnings call on March 6.
    The recall and production problems add to a long list of issues at Lordstown since the company went public nearly 2½ years ago. It has been plagued by management, production and execution issues.
    Automakers routinely have issues and recalls associated with vehicles but problems with EVs, specifically batteries, are of particular concern and interest, as the automakers invest billions of dollars in the vehicles.

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    Feds point to overheated wheel bearing in report on Ohio train derailment

    Federal authorities on Thursday pointed to an overheated wheel bearing on a Norfolk Southern train that derailed and released toxic chemicals in East Palestine, Ohio.
    The preliminary report from the National Transportation Safety Board did not offer an exact cause of the derailment but outlined several operational concerns.
    According to the report, the train was traveling about 47 miles per hour at the time of the derailment, below the speed limit of 50 miles per hour.

    Workers continue to clean up remaining tank cars, Tuesday, Feb. 21, 2023, in East Palestine, Ohio, following the Feb. 3 Norfolk Southern freight train derailment.
    Matt Freed | AP

    Federal authorities on Thursday pointed to an overheated wheel bearing on a Norfolk Southern train that derailed and released toxic chemicals earlier this month in Ohio.
    The preliminary report from the National Transportation Safety Board did not offer an exact cause of the East Palestine, Ohio, derailment but outlined several operational concerns.

    “Surveillance video from a local residence showed what appeared to be a wheel bearing in the final stage of overheat failure moments before the derailment,” the report said. “The wheel bearing and affected wheelset have been collected as evidence and will be examined by the NTSB.”
    In a press conference Thursday afternoon, National Transportation Safety Board Chairwoman Jennifer Homendy said “it was the combination of the hot axle and the plastic pellets which started the initial fire.”
    Homendy said roller bearings typically have a finite life of between 100,000 and 300,000 miles. Overheating in roller bearings could stem from fatigue cracking, water damage, mechanical damage, a loose bearing or a wheel defect.
    “It is recognized in the railway industry that wheel set roller bearings can fail catastrophically in as few as 10 to 15 miles on a train traveling at track speed,” Homendy said. “You cannot wait until they fail. Problems need to be identified thoroughly so something catastrophic like this does not occur again. This of course was much earlier than 10 to 15 miles, so we’re going to look at that.”
    Future investigative activity will focus on the wheelset and bearings, tank car design and maintenance procedures, derailment damage, inspection practices and a review of the accident response, the NTSB said.

    At about 9 p.m. local time on Feb. 3, an eastbound Norfolk Southern freight train derailed, including 11 tank cars carrying hazardous materials that subsequently ignited. These chemicals included vinyl chloride, a highly flammable carcinogen. Thirty-eight railcars derailed in the incident, according to the NTSB report.
    According to the report, the train was traveling about 47 miles per hour at the time of the derailment, below the speed limit of 50 miles per hour. The train’s positive train control system, in place to prevent over-speed derailments, was operating at the time of the derailment.
    After the train passed a wayside defect detector, it transmitted an alarm message instructing the crew to stop the train to inspect the hot axle. The Norfolk Southern train was equipped with a hot bearing detector system, designed to detect overheated bearings. These detectors are located on the ground pointing up, using infrared technology. NTSB has not identified any operational issues with the wayside defect detectors, nor any track defects.
    However, authorities noted a shorter distance between sensors may have helped.
    “Had there been a detector earlier, that derailment may not have occurred. But that’s something we have to look at,” Homendy said.
    At the time the train was instructed to stop, the bearing’s temperature recorded a temperature of 253 degrees hotter than ambient temperatures, above a threshold of 200 degrees at which point temperatures are considered critical, according Norfolk Southern criteria. At the previous detector, it recorded a temperature of 103 degrees above ambient temperatures. The report said temperatures between 170 to 200 degrees require a stop. Each train company creates their own thresholds, Homendy said, though the NTSB will investigate if warning thresholds need to be changed.
    “We have no evidence that the crew did anything wrong,” Homendy said.
    Homendy said there are federal regulations stating that train cars need to be able to be cooled for 100 minutes, though the fire lasted for well longer than 100 minutes. This means the train car’s insulation kept the cars from cooling.
    A one-mile evacuation zone was implemented after the derailment, impacting up to 2,000 residents.
    Two days after the derailment, temperatures continued to rise within five of the derailed tank cars carrying 115,580 gallons of vinyl chloride. Due to the possibility of a catastrophic explosion that could have sent shrapnel up to a mile, Norfolk Southern carried out a controlled release three days later. The NTSB had no role in the decision making or carrying out of the vent and burn.
    No fatalities or injuries were reported.
    Homendy said the NTSB will hold a rare investigative field hearing in the spring in East Palestine to collect information from witnesses and discuss possible solutions.
    “We’ve never seen an accident that isn’t preventable,” Homendy said. “I don’t like the word accident, I hate to use it. Nothing is an accident.”

    Working on cleanup

    Norfolk Southern CEO Alan Shaw told CNBC in an interview that aired Tuesday he believes it’s safe for families to return to East Palestine. Officials reported air levels are safe and the town’s water is free of harmful levels of contaminants.
    “Our focus right now is on environmental remediation, cleaning up this site, continual air monitoring, water monitoring, financial assistance to the residents of this community, and investing in this community so that the community in East Palestine can thrive,” Shaw said.
    However, residents continue to express skepticism. Ohio opened a health clinic Tuesday to address growing reports on headaches, nausea and rashes in the community, and some residents have reported dead chickens and fish near the site. A number of residents who fled their homes have sued Norfolk Southern.
    On Tuesday, the Environmental Protection Agency ordered Norfolk Southern to handle and pay for all cleanup efforts.

    Shaw told CNBC that Norfolk Southern has reimbursed or committed $6.5 million to East Palestine and will continue to provide financial assistance to residents.
    The town has become a political hotspot after former President Donald Trump, a Republican, paid a visit on Wednesday to meet with first-responders and local elected officials. Trump, who won Ohio in 2016 and 2020, suggested that the Biden administration had shown “indifference and betrayal” in responding to the crisis — in addition to promoting his name-brand water.
    Trump did not mention on Wednesday his administration in 2018 scrapped a 2015 Obama-era rule mandating advanced braking technology on trains transporting hazardous or flammable materials.
    The Thursday report comes the same day that Transportation Secretary Pete Buttigieg visited the site. Buttigieg sent a letter Sunday to Norfolk Southern, warning that the company must “demonstrate unequivocal support for the people” of East Palestine.
    Buttigieg has drawn criticism from Republican politicians for his response to the crisis. Sen. Marco Rubio, R-Fla., has called on Buttigieg to resign or be fired for “a gross level of incompetence and apathy.” Buttigieg acknowledged in a CBS News interview Tuesday that he “could have spoken sooner about how strongly I felt about this incident.”
    In the press conference, Homendy said this investigation is “not about politics” and that the goal is to issue safety recommendations guided by facts.
    “This is a community that has been devastated,” she said. “They deserve to know what happened, how to prevent it from happening again. They deserve to have the right solutions.”

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    It’s time for Alphabet to spin off YouTube

    Compared with the attention heaped on Bob Iger’s return to the helm of Disney and the stepping back of Reed Hastings at Netflix, news on February 16th that Susan Wojcicki would resign from YouTube after nine years as ceo caused barely a rustle in the media pages. That is a sign of two things. First, how little attention Wall Street analysts and entertainment-industry scribblers pay to the business of YouTube, even though it has become a hub—as well as a byword—for global video. Second, how overshadowed it is by the teetering ramparts of its parent company, Alphabet. Sundar Pichai, the tech giant’s beleaguered boss, is fighting wars on so many fronts, from Microsoft’s ChatGPT-inspired encroachment on Google search to trustbusters and the Supreme Court, that the goings-on at YouTube must seem like a sideshow.Listen to this story. Enjoy more audio and podcasts on More