TELUS Corporation (NYSE:TU) reported third-quarter 2026 earnings below analyst expectations despite revenue exceeding forecasts, as the Canadian telecommunications company outlined a restructuring strategy focused on reducing debt, improving efficiency and strengthening its core operations.
Adjusted earnings were C$0.16 per share, slightly below the consensus estimate of C$0.17. Revenue declined 2% year over year to C$5.02 billion from C$5.11 billion, although it exceeded analysts’ expectations of C$4.96 billion.
The company recorded a net loss of C$660 million, primarily reflecting an C$800 million non-cash goodwill impairment related to TELUS Health.
TELUS Digital Weakness Weighs on Operating Performance
Consolidated service revenue declined 1% to C$4.5 billion, as growth in the company’s core telecommunications operations was offset by weaker performance at TELUS Digital.
The digital services division experienced reduced service volumes from two major hyperscale customers, contributing to lower consolidated profitability.
Adjusted EBITDA decreased 5% to C$1.8 billion, reflecting the impact of TELUS Digital’s performance and the absence of real estate gains recorded in the previous year.
The C$800 million goodwill impairment at TELUS Health resulted from revised growth expectations and updated business valuations during an ongoing divestiture process.
Company Targets C$900 Million in Annual Savings
TELUS announced an operational efficiency programme designed to generate approximately C$900 million in annualised cash savings by the end of 2028.
The initiative will focus on operational improvements and greater capital efficiency as management seeks to strengthen the company’s financial position.
President and Chief Executive Officer Victor Dodig outlined the objectives of the transformation strategy.
“Our strategy has a clear objective: to restore TELUS as a leading communications and AI infrastructure company in Canada,” Dodig said.
“We have identified specific measures to fundamentally transform the business and are acting with urgency to strengthen our financial foundation.”
TELUS is also prioritising the potential sale of TELUS Health and TELUS Agriculture & Consumer Goods, with proceeds intended to reduce outstanding debt.
The company maintained its target of lowering net debt to adjusted EBITDA to 3.0 times or less by the end of 2028, compared with 3.6 times at the end of the third quarter.
Mobile Business Adds 84,000 Customers
Despite challenges elsewhere in the business, TELUS reported continued growth in its mobile telecommunications operations.
Mobile network revenue increased 1%, supported by the addition of 84,000 net new mobile phone customers during the quarter.
Average revenue per user remained stable at C$57.22, while mobile phone churn improved to 1.01%, its lowest level in three years.
The customer retention improvement provided a positive indicator for the company’s core wireless business amid broader restructuring efforts.
TELUS Maintains Full-Year 2026 Guidance
TELUS reaffirmed its financial outlook for 2026, forecasting consolidated service revenue growth of between flat and negative 2%.
The company also continues to expect adjusted EBITDA to decline between 2% and 4% for the full year.
The unchanged guidance reflects continued pressure from TELUS Digital alongside relatively stable performance in the company’s core telecommunications operations.
Management’s longer-term priorities include reducing leverage, improving operating efficiency and concentrating resources on communications and AI infrastructure.
Investors will monitor progress toward the C$900 million savings target, planned asset disposals and the company’s ability to reduce its debt ratio to 3.0 times or below by the end of 2028.