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Apple’s Magic Wears ThinAs Its Earnings Disappoint

Mali Exposes Flaws inWest’s Security Plans

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Vital Signs

Union membership fellin 2012, continuing adecadeslong drop. Laborunions represented 11.3% ofemployed workers last year,down half a percentage pointfrom 2011 and a new postwarlow. The latest decline partlyreflected a drop in public-sector workers, as states cutjobs to repair budgets. Attheir peak, unions representedroughly a third of employedworkers in the mid-1950s. A6

Union members, as apercentage of all employed

Source: Labor Department

’80s8

12

16

20%

'90s '00s '10s

>

Apple recorded flat profitdespite selling 18 million

more iPhones and iPads, as itspent heavily to roll out newproducts to fend off rivals.The company’s stock fell9.7% in after-hours trading. A1nNetflix shares jumped about35% after hours as the firmposted a surprise profit andadded more Internet sub-scribers than expected. B1n A government informanthas implicated a prominent ex-trader at SAC, telling investi-gators the two swapped con-fidential stock tips for years. C1n The Dow industrials rose67.12 points to 13779.33, withalmost all of the gain comingfrom IBM, to record their ninthadvance in 10 sessions. C4n Novartis’s chairman, Dan-iel Vasella, is stepping down.The firm nominated BayerHealthCare chief Joerg Rein-hardt to succeed him. B3n Japanese officials said datafrom a Boeing 787 Dream-liner that made an emergencylanding show no evidence itsbattery was overcharged. B2nMichael Dell has a deal toget a Dreamliner, numberinghim among planned customerspotentially affected by the out-come of the jet’s troubles. B2n Chesapeake Energy agreedto let the EPA conduct testsat one of its natural-gas drillingsites as part of a safety probeof hydraulic fracturing. B3n General Dynamics swungto a loss, posting a $2 billionwrite-down in its information-technology business that thefirm’s CEO called a “reset.” B4n Neel Kashkari, who ranTARP during the financialcrisis, is leaving Pimco toconsider running for office inCalifornia as a Republican. C1n NYSE Euronext has no in-tention of selling its Euro-pean unit to a rival followinga planned takeover by ICE,NYSE chief Niederauer said. C3n Goldman Sachs is tryingto block a shareholder pro-posal for an independent chair-man of its board from ap-pearing on the proxy ballot. C3nMcDonald’s earnings beatexpectations, reversing twoquarters of misses, but therestaurant chain said it ex-pects tough times ahead. B4n Italian lender Monte deiPaschi looked headed for moreturmoil amid fears about theimpact of years-old struc-tured-product contracts. C3nXinhua Finance’s founder,who was indicted over an al-leged $50 million fraud, hasagreed to a plea deal and ap-pears poised to plead guiltyto a reduced charge. C3n Creditors are seeking toclaw back over $21 millionfrom insiders and affiliatesof the pharmacy tied to a fa-tal meningitis outbreak. A6n Hedge-fund manager Da-vid Einhorn said his firmprofited from a bet againstHerbalife shares last year. C3

n The House passed a short-term debt-ceiling extension.The measure extends federalborrowing authority throughMay 18. It passed with strongGOP support, despite previ-ous Republican opposition tosuch a move if it didn’t in-clude spending cuts. GOPRep. Ryan promised he wouldsubmit a budget plan thatwould erase the federal defi-cit within a decade by cuttinggovernment spending—andwithout raising tax revenue. A4The government neared the$16.394 trillion debt ceilingon Dec. 31, but the Treasuryhas juggled assets so it cancontinue borrowing money.n The Pentagon is droppingthe last vestiges of rules bar-ring women in combat. Thenew policy should allowwomen to serve alongsideinfantry troops in such rolesas battlefield medics andspecial-operations pilots. A1n Clinton defended the ad-ministration’s handling of theattack on the U.S. consulate inBenghazi, Libya, in testimonybefore a Senate panel. A6nThe House voted to with-hold senators’ pay unless theSenate passes a budget bymid-April, but some scholars saythe bill is unconstitutional. A4n Israel’s Netanyahu facesthe difficult task of forming agoverning coalition after histwo-party bloc won only halfthe seats in parliament. A8n Scientists stored audio andtext on DNA fragments andthen retrieved them, a methodthat may one day help handlethe flood of digital data. A3nNorth Korea warned that itis prepared to conduct a nu-clear test and carry out morelong-range rocket launches.A12n Los Angeles police arresteda former elementary-schoolteacher, alleging he molested20 children and one adult. A2n Libya is boosting securityat its oil fields to avoid a re-peat of the terrorist attack onan Algerian gas complex. A10n Turkey is pushing for ano-fly zone over Syria, but itsforeign minister admitted theoption appears unlikely. A12nA suicide bomber struck aShiite funeral in northern Iraq,killing at least 25, an attacklikely to deepen a sectarian rift.nAn Indian panel called forlaws to crack down on sexualassault and harassment andspeed access to justice. A12nAn Arctic chill settled overthe Midwest, with tempera-tures in northern Minnesotanearing 40 below zero. A2n Scientists are resumingresearch on bird flu that theyhalted last year as countriesadopt new safety rules.n Jordanians voted for a par-liament with wider authority,in a bid by the monarchy toavoid an Arab uprising.n Died: A.W. Clausen, 89,Bank of America CEO wholater led the World Bank. B10

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What’s News–i i i i i i

France’s attack on Islamic extremists inMali this month is exposing major strains inthe Western world’s security strategy.

As the French assault gained steam in WestAfrica, France sought help from its allies—only to find that the U.S. and other North At-lantic Treaty Organization states eitherweren’t ready or couldn’t offer much. Canadaand the U.K. quickly ponied up three cargoplanes, two of which broke down en route.

By far the biggest breakdown, however,

played out between the U.S. and France, asWashington sent what Paris saw as mixedmessages about U.S. levels of commitment totaking on an al Qaeda affiliate in Mali beforeand after the French attack began.

French officials involved in planning theMali campaign say they had expected quick,robust U.S. military support based on com-ments by Pentagon officials in a series of pri-vate meetings, including one last October inParis about how to tame violence in Northand West Africa. According to French officialsin attendance, the message that day fromMichael Sheehan, the Pentagon’s point manfor special operations, seemed clear: Stop thegroup known as AQIM—al Qaeda in the Is-

lamic Maghreb—and its allies from creating adesert safe haven.

NATO officials at the meetings also say U.S.Defense Secretary Leon Panetta’s message toFrance and other allies on the sidelines of aNATO summit last fall was that the Pentagonwould do “whatever it takes” to help with anintervention in Mali against AQIM.

Senior U.S. defense officials dispute thoseaccounts, saying Washington’s messages toFrance may have been “lost in translation.”During the meetings, the U.S. officials said,neither Mr. Panetta nor Mr. Sheehan directlyurged France to use force and didn’t promisespecific support.

PleaseturntopageA14

Apple Inc. recorded a flatprofit despite selling 18 millionmore iPhones and iPads, as itspent heavily to roll out newproducts to fend off intensifyingcompetition.

Spooked investors erasednearly $47 billion from the com-pany’s stock-market value in af-ter-hours trading, about as muchas the combined worth of DellInc., Nokia Corp. and Research InMotion Ltd.

The flat earnings in the holi-day quarter come after severalyears of supercharged growth

that made Apple the most valu-able U.S. company and fan wor-ries about the Silicon Valley gi-ant’s momentum and demand forits new devices.

Apple executives predictedgrowth would continue to slow.The company expects revenue torise about 7% in the current pe-riod after reporting an 18% gainin the holiday quarter.

Apple’s quarterly report wasconsidered among the most im-portant in years for the company,as concerns about demand for itsnew iPhone 5 and its iPad tabletsdragged its stock from highs ofmore than $700 a share in Sep-

tember to less than $500 in mid-January. In after-hours tradingWednesday, Apple’s stock fell9.7% to $464.09.

Late last year, the companywarned that its aggressive prod-uct rollout schedule for the holi-days, including new iPhones,iPads, iPods and a new iMacdesktop, would hurt profit as thecompany perfected manufactur-ing efforts. Manufacturing costsmore in early stages until thecompany perfects production

Pleaseturntothenextpage

BY IAN SHERR

The Pentagon is dropping thelast vestiges of rules barringAmerican women from serving incombat, paving the way for thelargest expansion ever of theirrole on the front lines.

Women in the military alreadyare allowed to serve on most Navyships, as combat pilots and inhundreds of support jobs, includ-ing those in war zones. But theyhave been historically excludedfrom direct combat roles, by fed-eral law in earlier times and morerecently by military policy.

That will change Thursdaywhen Defense Secretary LeonPanetta rescinds the 1994 Penta-gon policy that bans women, whonowmake up about 14% of active-duty military personnel, fromcombat. The new measure will al-low women to serve in combatroles—but, importantly, allow themilitary services to establish ex-ceptions.

The change is an acknowledg-ment that women on modern bat-tlefields already are in thefight—152 women have died in

PleaseturntopageA6

BY JULIAN E. BARNESAND DION NISSENBAUM

CombatBan forWomenTo End

By Adam Entous andJulian E. Barnes in Washington

and Drew Hinshaw in Bamako, Mali

Jim

LoScalzo/EuropeanPresspho

toAgency

This British Assault on an IslandOff Argentina Is for the Birds

i i i

Mission: Kill Rampaging Rats,Save Pipits; ‘They Will Outthink You’

LITTLE DOWNHAM, U.K.—Britain is dispatching a band ofskilled killers to an island off theArgentine coast on a boat carry-ing a lethal arsenal.

No, not to repeat the FalklandsWar. This time, it is to attack aproblem that hasbeen brewing in a re-mote British overseasterritory for morethan 200 years: ram-paging rats.

Specialists fromthe U.K. are calling itthe world’s biggestrat cull. The locationis the glacial island ofSouth Georgia in theAtlantic, about 1,200miles east of the tipof South America. The problem:the island is overrun with the ratsthat were first brought by sealingand whaling ships in the 18thcentury.

South Georgia is uninhabitedby people. But the rats are a seri-ous nuisance, conservationistssay, because they eat the eggsand chicks of many species ofbirds—killing tens of thousandsevery year. That includes somethat are unique to the island andin danger of extinction, such as

the small, brown-speckled South Geor-gia Pipit, the Antarc-tic’s only songbird.

Leading “TeamRat” is Anthony Mar-tin, a 58-year-oldwhite-bearded zoolo-gist, whom somehave called “the PiedPiper” for his role inthe rat cull.

Mr. Martin needsmore than a magic

flute to get rid of the rats. Themonthslong mission involves dis-tributing by helicopter about 200tons of rat bait laced with a pow-

PleaseturntopageA14

Brown rat

BY CASSELL BRYAN-LOW

A Fiery Clinton Pushes Back at Benghazi Hearings

‘We had four dead Americans. Was it because of a protest,or was it because of guys out for a walk one nightwho decided they’d go kill some Americans?What difference, at this point, does it make?’

—Responding to criticism of erroneous early accounts of attacks, A6

Expanding RanksPercentage of active-duty militarypersonnel who are female

Source: U.S. Dept. of DefenseThe Wall Street Journal

15

0

5

10

%%

1950 ’60 ’70 ’80 ’90 2000

2010:14.4%

Heard on the Street: Were theresults really that bad?.......... C10

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