Key Takeaways
- Verizon said Wednesday it would take a $5.8 billion charge to write down the value of its Verizon Business Group.
- The telecom firm noted the unit faced declines in wireline revenue along with competitive and macroeconomic pressures.
- Verizon said that a review done in the fourth quarter showed the long-term financial outlook of the unit was lower than previously expected.
Verizon Communications Inc. (VZ) shares declined Wednesday after the telecommunications giant said it would take a $5.8 billion charge in the fourth quarter to write down its Verizon Business Group.
The company wrote in a regulatory filing that the unit, which works with business and government clients, “experienced secular declines, as well as continuing competitive and macroeconomic pressure, in wireline revenue across its customer groups.”
Verizon said that in the latest quarter it finished a comprehensive planning review of the group, which determined that financial projections for the business over the next five years were lower than previously anticipated.
It added that after the $5.8 billion charge, the goodwill balance of the unit was $1.7 billion as of Dec. 31, 2023.
Revenue at the Verizon Business Group in the third quarter dropped 4% from a year ago to $7.5 billion. The company cited lower wireline revenue and wireless equipment revenue for the decline.
Shares of Verizon Communications were 1.4% lower at $38.76 per share as of about 3:15 p.m. ET Wednesday. They’ve lost about 5% of their value over the past year.
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