Verizon’s fourth quarter to take $5.8 billion hit from unit write down

(Reuters) -Verizon’s fourth-quarter results will take a $5.8 billion hit from charges related to a write down in the value of its unit that caters to businesses and government clients due to declining wireline revenue, the U.S. telecom firm said.

The move follows a five-year review of the unit that showed its financial projections were now much lower than previous planning cycle, it disclosed in a regulatory filing on Wednesday.

The wireline business, which includes legacy voice and data services, has been under pressure due to strong competition, an uncertain economy and a broader shift to wireless services.

After the charge, the goodwill balance of the unit was $1.7 billion as of Dec. 31, Verizon said. Its shares were down nearly 1%.

In the third quarter, Verizon Business saw a 4% decline in revenue due to lower wireline and wireless equipment revenue. The unit accounts for more than a fifth of the company’s total revenue.

Verizon will report its fourth-quarter results on Jan. 23.

(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Savio D’Souza and Shilpi Majumdar)