- Verizon announced Wednesday that the writedown on the value of Verizon Business Group will cost it $5.8 billion.
- The telco noted that the sector is facing declining wireline revenues along with competitive and macroeconomic pressures.
- Verizon said a survey conducted in the fourth quarter showed the long-term financial outlook for the division was lower than previously expected.
Shares of telecom giant Verizon Communications (VZ) fell on Wednesday after the company announced it would record a $5.8 billion charge in the fourth quarter to write down Verizon Business Group.
The company said in a regulatory filing that the unit, which works with commercial and government customers, “has experienced long-term declines in wireline revenue across our customer groups and continued competitive and macroeconomic pressures.”
Verizon announced that it completed a comprehensive planning review of the group in its most recent quarter and determined that financial projections for the business over the next five years are lower than previously expected.
It added that after the $5.8 billion charge, the division's goodwill balance as of December 31, 2023 was $1.7 billion.
Verizon Business Group's third-quarter sales were $7.5 billion, down 4% from a year earlier. The company cited a decline in wireline revenue and wireless equipment revenue as a factor.
Verizon Communications stock was down 1.4% at $38.76 per share as of 3:15 p.m. ET on Wednesday. It has decreased in value by approximately 5% over the past year.