■ Cut · July 31, 2026
TELUS Q2 2024 Earnings Decline and Dividend Reduction
TELUS reported lower Q2 adjusted earnings and operating revenue, leading to a dividend cut. The company's stock fell over 11%.
Q2 Results Show Declines
TELUS Corporation (TU) reported its second-quarter financial results on July 31, revealing a decrease in adjusted earnings and operating revenue compared to the same period last year. The company's adjusted earnings per share (EPS) came in at $0.23, down from $0.31 in Q2 2023, a decline of approximately 26%. Operating revenue fell to $4.9 billion, a drop of 1.2% year-over-year.
The decline was attributed to several factors, including increased competition in the telecommunications sector and higher financing costs. TELUS also noted that its mobile phone subscriber growth slowed, with net additions of 112,000, down from 158,000 in the prior-year quarter.
Dividend Cut Announced
In light of the weaker financial performance, TELUS announced a reduction in its quarterly dividend. The new dividend will be $0.3525 per share, down from the previous $0.3891 per share, a cut of approximately 9.4%. This marks the first dividend reduction for the company in over a decade. The company stated that the move is intended to strengthen its balance sheet and provide more flexibility for future investments.
The dividend cut was not entirely unexpected, as some analysts had flagged concerns about the company's payout ratio, which had exceeded 100% of free cash flow in recent quarters. However, the magnitude of the cut was larger than many had anticipated.
Market Reaction
Following the announcement, TELUS shares fell sharply. On the Toronto Stock Exchange, the stock dropped 11.74% to close at C$21.45. In New York, TELUS Corporation (TU) shares declined 11.84% to $15.72. The sell-off reflected investor disappointment over the earnings miss and the dividend reduction.
Despite the negative reaction, some analysts noted that the dividend cut could be a prudent step to ensure long-term sustainability. TELUS has a long history of dividend payments, and the company remains committed to returning capital to shareholders, albeit at a lower level.
What it means for income investors
The dividend cut at TELUS is a significant event for income-focused investors, as it reduces the yield from approximately 6.5% to around 5.9% based on the new dividend rate. However, the move may help the company maintain a more sustainable payout ratio and preserve cash for growth initiatives. Investors should monitor TELUS's future earnings and cash flow to assess the reliability of the new dividend level.
Reporting based on: Moomoo. Figures verified against market data where available.