TELUS (NYSE:TU) Posts Earnings Results, Misses Estimates By $0.02 EPS

Key Points

• TELUS missed earnings estimates: Quarterly EPS was $0.11 versus the $0.13 consensus and $0.17 a year earlier. An approximately CAD 800 million non-cash impairment contributed to a GAAP loss.
• Financial performance weakened, despite stronger wireless trends: Service revenue fell 1%, adjusted EBITDA declined 5%, and free cash flow dropped 35% to CAD 396 million; meanwhile, mobile phone net additions reached 84,000 and churn hit a three-year low.
• The company is pursuing savings and debt reduction: TELUS targets CAD 900 million in annualized cash savings by the end of 2028 and aims to lower net debt leverage from 3.6x to 3.0x or less.

TELUS (NYSE:TU - Get Free Report) TSE: T posted its quarterly earnings results on Friday. The Wireless communications provider reported $0.11 EPS for the quarter, missing the consensus estimate of $0.13 by ($0.02), Zacks reports. TELUS had a positive return on equity of 8.01% and a negative net margin of 4.51%.

Here are the key takeaways from TELUS's conference call:

• Q3 performance weakened: consolidated service revenue fell 1%, adjusted EBITDA declined 5% (2% excluding prior-year one-time items), and free cash flow dropped 35% to CAD 396 million. Adjusted EPS was CAD 0.16, down from CAD 0.24, while a non-cash CAD 800 million TELUS Health impairment drove basic EPS to negative CAD 0.42.
• Wireless customer trends improved, with 84,000 mobile phone net additions and blended churn of 1.01%, the lowest quarterly level in three years; postpaid churn was below 0.9%. Mobile service revenue rose 1% and fixed data revenue rose 2%, although internet net additions were 10,000 amid a deliberate shift away from subsidized volume.
• TELUS is targeting CAD 900 million in annualized cash savings by the end of 2028, including roughly CAD 250 million in structural savings with full run-rate benefits expected from 2027. The company expects to invest about CAD 150 million to deliver the broader program.
• TELUS expects about CAD 500 million in cumulative revenue over the next three years from its digital infrastructure opportunities, including data-center connectivity and sovereign AI services. It cited more than CAD 1 billion in total contract value in its pipeline and 38 MW of secured power, while saying it will add capacity in line with customer demand.
• Management aims to reduce net debt leverage from 3.6 times to 3.0 times or lower by the end of 2028 through savings, asset monetizations and potential PureFibre partnerships that would preserve TELUS’s control. One Health asset is at an advanced stage with a prospective buyer, but the fiber discussions remain early; 2026 guidance was reaffirmed.

TELUS Stock Performance

NYSE:TU traded down $0.35 during mid-day trading on Friday, reaching $9.06. 11,361,738 shares of the stock were exchanged, compared to its average volume of 6,162,647. The stock has a market capitalization of $14.40 billion, a P/E ratio of 14.84, a P/E/G ratio of 21.33 and a beta of 0.63. TELUS has a 1 year low of $7.64 and a 1 year high of $14.95. The company has a 50 day simple moving average of $8.72 and a 200-day simple moving average of $11.24. The company has a quick ratio of 0.62, a current ratio of 0.67 and a debt-to-equity ratio of 1.88.

TELUS Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Monday, January 4th. Investors of record on Friday, December 11th will be given a C$0.19 dividend. The ex-dividend date of this dividend is Friday, December 11th. This represents a $0.75 dividend on an annualized basis and a dividend yield of 8.3%. TELUS's dividend payout ratio is -131.71%.

Key Stories Impacting TELUS

Here are the key news stories impacting TELUS this week:

• Positive Sentiment: TELUS declared a quarterly dividend of C$0.1875 per share, maintaining a cash return to shareholders. TELUS Declares C$0.1875 Quarterly Dividend
• Neutral Sentiment: The company said its transformation strategy is intended to support debt reduction and growth investment in core telecom and AI infrastructure; execution will be key to the financial impact. TELUS Reports Third Quarter 2026 Results
• Neutral Sentiment: TELUS appointed Marc Allera and Bill Thomas to its board, effective January 1, 2027. The appointments add leadership experience but do not indicate an immediate change to results. TELUS Appoints Marc Allera and Bill Thomas to Board of Directors
• Negative Sentiment: Quarterly EPS of $0.11 missed the $0.13 consensus and was down from $0.17 a year earlier. Adjusted EPS of C$0.16 also came in below FactSet’s C$0.17 estimate; reports describe this as the company’s fourth consecutive earnings miss. Telus Misses Q3 Earnings Estimates
• Negative Sentiment: An approximately $800 million impairment charge contributed to a third-quarter GAAP loss, raising concerns about asset values and weighing on the headline results. TELUS Reports Third-Quarter Loss After $800 Million Impairment

Wall Street Analysts Forecast Growth

A number of research analysts have recently commented on TU shares. Weiss Ratings reiterated a "sell (d)" rating on shares of TELUS in a report on Tuesday. Barclays set a $10.00 target price on TELUS and gave the stock an "equal weight" rating in a research note on Tuesday, October 13th. Scotiabank reaffirmed a "sector perform" rating on shares of TELUS in a report on Monday, August 3rd. Bank of America lowered shares of TELUS from a "buy" rating to an "underperform" rating in a research note on Tuesday, August 4th. Finally, Desjardins cut shares of TELUS from a "moderate buy" rating to a "hold" rating in a report on Tuesday, August 4th. Three equities research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and five have assigned a Sell rating to the company. According to MarketBeat.com, TELUS presently has a consensus rating of "Reduce" and an average target price of $15.00.

TELUS Company Profile

TELUS Corporation is a Canadian communications and technology company headquartered in Vancouver, British Columbia. It provides telecommunications and digital services to consumers, businesses and public-sector organizations, primarily in Canada.

Its core offerings include wireless voice and data services, high-speed internet, television, home security and fixed-line voice services. TELUS also provides business connectivity, cloud, cybersecurity, information technology and communications solutions.

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