Telefonica to Halve 2026 Dividend; Targets Steady Growth

By Najat Kantouar

Telefonica said it plans to halve its 2026 dividend and deliver steady revenue and earnings growth in coming years, as the group aims to expand its digital services and gain exposure to defense markets.

The Spanish telecommunications company said Tuesday that it will cut dividends for 2026 to 15 European cents (17 U.S. cents) a share from 30 European cents this year. Dividends for 2027 and 2028 will be based on a 40% to 60% ratio of free cash flow after investments, it said.

Telefonica said it is looking to invest in artificial intelligence and other technologies, with the goal of boosting its consumer and business-focused operations, and tap into opportunities in cybersecurity and defense.

For the 2025-28 period, the company is targeting revenue growth at an average annual rate of 1.5% to 2.5%. It expects this to accelerate to 2.5% to 3.5% for 2028-30, with adjusted earnings before interest, taxes, depreciation and amortization anticipated to be in line with that.

Telefonica outlined the targets as it reported an increase in third-quarter net profit to 276 million euros from 3 million euros in the year-earlier period, and said it was on track to meet its full-year guidance.

Adjusted Ebitda rose 1.2% organically to 3.07 billion euros, while revenue fell to 8.96 billion euros from 9.10 billion euros. Analysts expected revenue at 8.95 billion euros and adjusted Ebitda at 3.04 billion euros, according to a company-compiled consensus.

Write to Najat Kantouar at najat.kantouar@wsj.com

(END) Dow Jones Newswires

November 04, 2025 02:53 ET (07:53 GMT)