In an SEC filing, telecommunications company Verizon (NYSE:VZ) disclosed that its fourth-quarter results would be impacted by a $5.8 billion goodwill write-down of its Business Group unit. The move comes from a five-year strategic planning review of this unit, forcing the company to lower its financial projections.
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VZ said that the unit’s performance continues to be impacted by declining secular trends, competitive pressures, and challenging macroeconomic conditions. In the first nine months of 2023, the company reported a 3% year-over-year decline in the unit’s revenue owing to lower demand for services by small and large businesses.
It’s important to highlight that Verizon is not the sole player contending with challenges in its wireline segment. Competitors such as AT&T (T) have also experienced the repercussions of secular declines, as it lowered the value of its Business unit in the fourth quarter of 2022 due to sluggish growth.
VZ’s Upcoming Results
Verizon is expected to release its fourth quarter and full-year 2023 results on January 23, before the market opens. The Street expects VZ to post earnings of $1.08 per share in Q4 compared with $1.19 per share reported in the prior-year period. Meanwhile, revenue is expected to fall 2% from the year-ago quarter to $34.55 billion.
Is Verizon a Buy, Sell, or Hold?
Of the 13 analysts covering Verizon, seven have a Buy rating, five suggest a Hold, and one assigned a Sell in the past three months. Overall, the stock comes in as a Moderate Buy. The average VZ stock price target is $41.23, implying upside potential of 6.1%. Shares are up 27.3% over the past three months.
