TELUS Slashes Dividend 55%, Takes $2.1B Impairment, and Slashes Guidance in Brutal Q2 Reset
TU is trading near its 52-week low of $9.95 (1.4% below the low) on elevated volume (1.9× avg).
Summary
TELUS reported a $1.8B Q2 net loss on a $2.1B non-cash impairment, cut its dividend 55%, and slashed full-year guidance across the board, pushing its leverage target out to 2028.
Key Events · Earnings and Guidance · TU
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Dividend Slashed 55%
The quarterly dividend has been reset to $0.1875 per share, or $0.75 annualized, down from $1.6736—a move expected to save roughly $2.7B in cumulative cash through 2028 for debt reduction. Effective October 1, 2026, the DRIP discount will be removed.
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$2.1B Non-Cash Impairment Drives $1.8B Net Loss
A pre-tax, non-cash impairment of $2.1B on goodwill and intangible assets at TELUS Digital, reflecting a reduced recoverable amount, resulted in a Q2 net loss of $1.8B, or $1.17 loss per share.
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Full-Year Guidance Slashed
For 2026, consolidated service revenue is now expected to be flat to down 2%, versus prior guidance of +2% to +4%; Adjusted EBITDA is seen down 2% to 4%, compared with +2% to +4% previously; capex is now approximately $2.6B, up from $2.3B; and free cash flow is projected at roughly $1.8B, down from $2.45B.
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Leverage Target Pushed to 2028
The net debt-to-Adjusted EBITDA target of approximately 3.0x or lower is now expected by year-end 2028, delayed from year-end 2027, as competitive pricing pressure and lower population growth weigh on organic cash flow.
Analysis · TU · Technology
A brutal second quarter saw TELUS swing to a $1.8B net loss, driven by a $2.1B non-cash impairment at TELUS Digital, while simultaneously slashing its dividend 55% and sharply downgrading full-year guidance. The dividend reset to $0.75 annually is expected to conserve roughly $2.7B in cash through 2028, earmarked for deleveraging, but it underscores severe financial strain. Full-year service revenue is now seen flat to down 2%, Adjusted EBITDA down 2–4%, and free cash flow has been cut to approximately $1.8B from $2.45B. The leverage target of 3.0x has been pushed out to year-end 2028. Although the impairment is non-cash, the dividend cut and guidance reset reflect competitive pressure, lower population growth, and a strategic pivot to shore up the balance sheet. The stock, already near 52-week lows, faces further pressure as income investors reassess the yield and growth prospects.
At the time of this filing, TU was trading at $9.81 on NYSE in the Technology sector, with a market capitalization of approximately $17B. The 52-week trading range was $9.95 to $16.72. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.