Telus slashes dividend and reports Q2 loss as new CEO Victor Dodig takes the helm
Not a good month for two of my dividend stocks. First Bridgemarq Real Estate (Bre) announces a major re-org of the company which included slashing their dividend payout. Now Telus is doing the same thing...That's investing, sometimes you are going to take hits like this. The important thing to do is not to panic. Neither one of these companies represents a large holding for me. I am however taking a significant hit on my dividend income. I suspect both of these stocks are now trading at or near their lows. I'm going to continue to hold them and see if the management teams can turn things around.
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The Canadian Press, July 31, 2026 at 1:35PM EDT
Telus Corp. cut its dividend by more than half on Friday as it reported a loss in its latest quarter, signalling a new direction following a change in the company’s top job.
The telecom company reported a loss attributable to common shareholders of $1.8 billion or $1.17 per share for the quarter ended June 30. That compared with a profit of $7 million in the same quarter last year.
Also Friday, Telus slashed its quarterly dividend, a move it said is expected to generate around $2.7 billion in savings through 2028, which it will use to reduce its debt.
It will now pay shareholders a quarterly dividend of 18.75 cents per share, down around 55 per cent from its previous payout of 41.84 cents per share.
The move “sets our company up for transformation strength going forward,” said Telus’ new president and CEO Victor Dodig in an interview Friday, as he marked his first earnings report with the company.
Dodig, the former chief executive of CIBC, took the helm at Telus earlier this month. He succeeded longtime CEO Darren Entwistle, who had led the company for more than 25 years.
The dividend cut was steeper than some analysts forecast, with Desjardins’ Jerome Dubreuil saying Telus was “ripping off a much bigger Band-Aid than we had expected.” Dodig said the move was designed to avoid repeating it in the future.
“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 make sure you do it once and you’re done,” he said.
“It may have been slightly higher than some expectations. I think many of them, when they really look at it, they’ll say, ‘OK, we understand what you’re trying to do.’”
Telus also announced it would remove its discounted dividend reinvestment plan effective Oct. 1. The plan has allowed shareholders to use their dividends to buy Telus shares from the company at a discount to the market price.
It had previously said late last year it would begin phasing out the program in 2026, eventually removing the discount entirely by 2028.
Scotiabank analyst Maher Yaghi said the dividend cut “was necessary to restore financial flexibility,” as he called it a “weak quarter” for the company.
“The action is the right one, but the size of the guidance reduction shows it was not discretionary,” he said in a note.
“The debate now moves to execution: cost reduction, (capital expenditure) normalization, and monetization proceeds will determine whether the new framework will decisively turn around expectations.”
The telecommunications giant also updated its guidance for the year, saying it now expects consolidated service revenue to be flat to negative two per cent, compared with its previous forecast of two to four per cent growth.
Telus attributed the downgrade to pressures on fixed data, Telus Digital and slower-than-anticipated growth in Telus Health.
Capital expenditures for 2026 are now expected to be approximately $2.6 billion, up from $2.3 billion, reflecting inflation and supply chain dynamics, investment toward AI data centres, along with network infrastructure upgrades.
Dodig said the updated outlook reflects “an abbreviated detour” as the company undergoes a transformation under his watch — plans for which he said would be revealed later this year.
“We’re dealing with new realities in the world,” said Dodig.
“I think the more we can simplify around our core business in particular and harness those assets and invest in those assets, those are our crown jewels.”
He said Telus would have a “greater focus” as it looks to simplify the number of businesses in its portfolio, including through monetization.
“But we want do that in a very thoughtful way so that we realize their full value because all of the businesses that we have are good businesses. Whether we should have them for the long run or someone else should have, that’s the kind of stuff that we’re working on,” said Dodig.
“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.”
RBC analyst Drew McReynolds said although the dividend cut was “widely expected,” it will weigh on the company’s stock price. He said that move, along with the downward guidance revision, “points to unanticipated short-term pain, which we expect to pressure the shares today.”
Dodig confident in telecom assets
On an adjusted basis, Telus said it earned 16 cents per share in its latest quarter compared with an adjusted profit of 22 cents per share a year earlier. Operating revenue and other income totalled $4.92 billion in the quarter, down from $5.08 billion a year earlier.
Dodig noted Telus has performed “relatively well” in a telecom market lacking tailwinds. The sector has faced challenges in recent years, including declining prices and a lack of population growth leading to fewer new subscribers.
But the new chief executive said those are factors Telus can overcome.
“We won’t be obsessed with the economy because we don’t control the economy. We control our strategy,” Dodig said.
“As I kind of look at what lies ahead, I think the demand for what we do is going to continue to increase. As the economy digitizes and as data becomes more and more important ... I can’t think of a better business to be in than our own with the assets that we have.”
Telus’ total telecom subscriber connections for the quarter reached 17.9 million, up from 16.9 million in the second quarter of 2025. It added 17,000 net mobile phone subscribers in the quarter, a decrease of 38,000 year-over-year.
Its mobile phone churn rate — a measure of subscribers who cancelled their services — was 1.08 per cent in the second quarter, up from 1.06 per cent a year ago, due to “customer switching decisions in response to continuing marketing and promotional price competition.”
Mobile phone average revenue per user was $56.36 in the quarter, a decrease of 22 cents or 0.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in roaming revenues and the commoditization of telecom services in the public sector.
Telus reported it signed up 20,000 net internet customers, a decrease of 7,000 year-over-year.
There were 187,000 connected device net additions, an increase of 75,000, reflecting fewer deactivations in the transportation and connectivity industries.
This report by The Canadian Press was first published July 31, 2026.
