■ Cut · July 31, 2026
Telus Cuts Dividend 55%, Reports Q2 Loss Under New CEO
Telus slashed its dividend by over half and posted a Q2 loss as new CEO Victor Dodig begins a transformation, aiming to reduce debt and refocus the business.
Dividend Reset and Q2 Results
Telus Corp. (TU) announced a significant reduction to its quarterly dividend on Friday, cutting it by approximately 55% to 18.75 cents per share from the previous 41.84 cents. The move is expected to generate around $2.7 billion in savings through 2028, which the company plans to use to reduce its debt. The dividend cut accompanies a reported loss attributable to common shareholders of $1.8 billion, or $1.17 per share, for the quarter ended June 30. This compares with a profit of $7 million in the same quarter last year. On an adjusted basis, Telus earned 16 cents per share, down from 22 cents per share a year earlier. Operating revenue and other income totaled $4.92 billion, down from $5.08 billion in the prior-year quarter.
New president and CEO Victor Dodig, who took the helm earlier this month from longtime leader Darren Entwistle, described the dividend reset as a decisive step to avoid future cuts. "When you look at a serious decision like a dividend reset, you want to make sure you’re at the appropriate level and you want to make sure you do it once and you’re done," Dodig said in an interview. The cut was steeper than some analysts had anticipated, with Desjardins' Jerome Dubreuil noting Telus was "ripping off a much bigger Band-Aid than we had expected."
Guidance and Strategic Shift
Telus also updated its full-year guidance, now expecting consolidated service revenue to be flat to negative two percent, compared with its previous forecast of two to four percent growth. The company attributed the downgrade to pressures on fixed data, Telus Digital, and slower-than-anticipated growth in Telus Health. Capital expenditures for 2026 are now projected at approximately $2.6 billion, up from $2.3 billion, reflecting inflation, supply chain dynamics, investment in AI data centres, and network upgrades.
Dodig indicated that the company is undergoing a transformation focused on simplifying its portfolio and enhancing returns. "Doing more with less will deliver greater returns, and a greater focus on return on capital going forward is something that we’re going to be focused on," he said. He added that Telus would consider monetizing certain businesses, but in a thoughtful way to realize their full value. The company also announced it will remove its discounted dividend reinvestment plan effective Oct. 1, a program that had allowed shareholders to buy shares at a discount.
Operational Highlights
Telus reported total telecom subscriber connections of 17.9 million for the quarter, up from 16.9 million in the same period last year. However, net mobile phone subscriber additions were 17,000, a decrease of 38,000 year-over-year. The mobile phone churn rate rose slightly to 1.08% from 1.06% a year ago, attributed to customer switching in response to competitive marketing.
RBC analyst Drew McReynolds said the dividend cut was "widely expected" but will likely pressure the stock price, along with the downward guidance revision. Scotiabank analyst Maher Yaghi called the cut "necessary to restore financial flexibility" and noted the size of the guidance reduction indicates it was not discretionary. The debate now shifts to execution, including cost reduction, capex normalization, and monetization proceeds.
What it means for income investors
The dividend cut marks a significant shift for Telus, which had maintained a long history of increases. The new payout ratio is lower, providing more room for debt reduction and potential future growth. Income-focused investors should note the reduced yield and the removal of the discount DRIP, which may affect total return expectations.
Reporting based on: BNN Bloomberg. Figures verified against market data where available.