Verizon Communications has seen a decline in the sale of landlines for businesses. In a recent filing with the Securities and Exchange Commission, the telecommunications company reported a non-cash goodwill impairment charge of $5.8 billion in the fourth quarter. This charge was made to write down the value of its Business Group division, which offers landlines and internet plans to both small and large businesses.
According to the filing, Verizon Business Group experienced a decline in wireline revenue across its customer base. This decline was due to both secular factors and ongoing competitive and macroeconomic pressures. As a result, the company conducted a comprehensive five-year review of the division’s financial outlook, leading to revised financial projections that were lower than previous reviews. Currently, the Business Group division has a goodwill balance of $1.7 billion.
In October, Verizon reported third-quarter revenue of $7.5 billion for the unit, which reflected a 4% decline compared to the previous year. This decline was primarily attributed to lower wireline revenue and reduced wireless equipment revenue.
More details regarding the unit’s performance will be disclosed on January 23rd, when Verizon releases its fiscal fourth-quarter results.
It is worth noting that AT&T, another major player in the telecommunications industry, also experienced a slowdown in wireline services growth. In the fourth quarter of 2022, AT&T recorded goodwill impairments of $24.8 billion. AT&T cited secular declines as a significant factor impacting the growth rates of their Business Wireline division.
On Wednesday, Verizon’s stock declined by 1.1%, while AT&T’s stock saw a slight increase.