Telus Q3 2026: Goodwill Writedown Drives GAAP Loss, Fourth Straight Miss

Telus reported adjusted EPS of $0.11 for the third quarter of 2026, missing expectations against the $0.12 consensus, with revenue of $3.57 billion also missing expectations. That revenue shortfall partly reflects an active divestiture process reshaping the company's segment mix, as well as an ongoing decline in TELUS Digital, where revenue fell on client ramp-downs in trust, safety, and AI data solutions.

An $800 million non-cash goodwill impairment on the TELUS Health unit, tied to revised growth expectations and an accelerating asset-sale process, dominated the quarter. That charge swung Telus to a GAAP net loss and pulled operating income sharply lower year over year. Adjusted net income, which strips out the impairment and restructuring costs, fell as the core business absorbed more pressure.

The quarter marks the fourth consecutive period in which Telus failed to meet consensus expectations on earnings per share, a streak that stretches back to Q2 2025. Each of the past four quarters has seen the reported figure come in below the estimate, and the gap has widened in the two most recent periods. Free cash flow dropped 45% year over year as lower EBITDA combined with capital expenditures that nearly doubled.

CEO Victor Dodig, appointed during a broader strategic reset, framed the quarter as a transitional moment for the company. The company launched a multi-year efficiency program targeting approximately $900 million in annualized cash savings exiting 2028, with asset sales from TELUS Health and TELUS Agriculture intended to fund debt reduction. Management also raised its restructuring cost assumption for the full year to approximately $900 million from $500 million previously.

Despite the quarter's turbulence, Telus reaffirmed its full-year 2026 free cash flow target of approximately $1.8 billion and kept its service revenue guidance at flat to down 2%. The company is targeting net debt to adjusted EBITDA of 3.0 times or lower by year-end 2028, down from an elevated 3.6 times currently. A quarterly dividend of $0.1335 per common share was declared, payable January 4, 2027, to shareholders of record December 11, 2026, signaling that management intends to maintain the payout even as it pursues deleveraging through asset sales and cost cuts.