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

Key Points

• TELUS reported quarterly EPS of $0.12, missing analysts’ $0.14 estimate by $0.02. Shares fell 11.3% to $9.55 during Friday trading.
• The company cut its 2026 outlook, now forecasting flat-to-2% lower service revenue, a 2%–4% adjusted EBITDA decline, and approximately $1.8 billion in free cash flow.
• TELUS recorded a $2.1 billion non-cash impairment at TELUS Digital and plans to reduce its quarterly dividend by 55% to $0.1875 per share, with the reset expected to save about $2.7 billion through 2028.

TELUS (NYSE:TU - Get Free Report) TSE: T posted its earnings results on Friday. The Wireless communications provider reported $0.12 EPS for the quarter, missing analysts' consensus estimates of $0.14 by ($0.02), Zacks reports. TELUS had a net margin of 4.54% and a return on equity of 8.29%.

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

• TELUS reduced its 2026 outlook, now expecting consolidated service revenue to be flat to down 2% and adjusted EBITDA to decline 2% to 4%, versus its prior forecast of 2% to 4% growth. Full-year free cash flow guidance was also cut to approximately $1.8 billion from $2.45 billion.
• TELUS Digital recorded a $2.1 billion non-cash impairment after faster-than-expected automation reduced demand for legacy content moderation and search-related services, while AI adoption has been slower and deal sizes smaller than previously modeled.
• The quarterly dividend will be cut 55% to $0.1875 per share effective October 1, with the dividend reinvestment plan discount ending at the same time. Management expects the reset to generate approximately $2.7 billion in cumulative cash savings through 2028.
• Management is targeting net debt to adjusted EBITDA of 3.0x or lower by the end of 2028, supported by dividend savings, lower capital intensity over time, asset monetizations, a moratorium on acquisitions, and tighter cost discipline.
• Core telecom performance was relatively stable: mobile network revenue grew 1%, ARPU trends improved for a fifth consecutive quarter, and the promotional environment showed signs of moderating. However, lower immigration is constraining subscriber growth, while fixed-business results remain challenged.

TELUS Trading Down 11.3%

NYSE:TU traded down $1.22 during mid-day trading on Friday, hitting $9.55. 32,781,328 shares of the stock traded hands, compared to its average volume of 6,129,106. The company has a quick ratio of 0.63, a current ratio of 0.67 and a debt-to-equity ratio of 1.59. TELUS has a 52 week low of $9.22 and a 52 week high of $16.72. The stock has a market capitalization of $15.04 billion, a price-to-earnings ratio of 21.72, a PEG ratio of 8.64 and a beta of 0.63. The firm's 50 day moving average is $11.25 and its two-hundred day moving average is $12.48.

TELUS Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, July 2nd. Stockholders of record on Wednesday, June 10th were issued a $0.4184 dividend. This represents a $1.67 annualized dividend and a dividend yield of 17.5%. The ex-dividend date was Wednesday, June 10th. TELUS's dividend payout ratio (DPR) is 275.00%.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the business. Cetera Investment Advisers lifted its position in shares of TELUS by 1.9% during the second quarter. Cetera Investment Advisers now owns 46,099 shares of the Wireless communications provider's stock worth $739,000 after purchasing an additional 841 shares in the last quarter. Equitable Holdings Inc. grew its holdings in shares of TELUS by 10.2% in the third quarter. Equitable Holdings Inc. now owns 11,905 shares of the Wireless communications provider's stock valued at $188,000 after purchasing an additional 1,105 shares in the last quarter. Northwestern Mutual Wealth Management Co. increased its stake in TELUS by 37.1% during the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 4,585 shares of the Wireless communications provider's stock worth $72,000 after buying an additional 1,241 shares during the period. Towarzystwo Funduszy Inwestycyjnych PZU SA lifted its holdings in TELUS by 129.0% during the 4th quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 2,473 shares of the Wireless communications provider's stock worth $33,000 after buying an additional 1,393 shares in the last quarter. Finally, Advisory Services Network LLC lifted its holdings in TELUS by 8.4% during the 2nd quarter. Advisory Services Network LLC now owns 23,555 shares of the Wireless communications provider's stock worth $379,000 after buying an additional 1,834 shares in the last quarter. Hedge funds and other institutional investors own 49.40% of the company's stock.

Analysts Set New Price Targets

A number of research firms recently issued reports on TU. Wall Street Zen raised shares of TELUS from a "sell" rating to a "hold" rating in a research note on Saturday, May 9th. Raymond James Financial started coverage on shares of TELUS in a research note on Wednesday, July 15th. They issued a "market perform" rating for the company. Scotiabank downgraded shares of TELUS from an "outperform" rating to a "sector perform" rating in a report on Friday, April 10th. TD Securities raised shares of TELUS from a "buy" rating to a "buy" rating in a report on Tuesday, April 28th. Finally, Canaccord Genuity Group lowered TELUS from a "buy" rating to a "hold" rating in a research report on Thursday, April 9th. Five research analysts have rated the stock with a Buy rating, five have issued a Hold rating and three have assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $15.67.

TELUS Company Profile

TELUS Corporation NYSE: TU is a Canadian telecommunications and technology company headquartered in Vancouver, British Columbia. It delivers a broad portfolio of consumer and business communications services across Canada, including mobile wireless, fixed-line voice, broadband internet, and television. TELUS also provides a range of enterprise services such as cloud and IT solutions, managed network services, cybersecurity and Internet of Things (IoT) offerings for business customers.

Beyond core connectivity, TELUS has expanded into health and digital services.

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