Third-quarter earnings reporting season is well underway, with most of the Canadian Edge Portfolio and roughly half of the How They Rate coverage universe turning in numbers by press time.

Thus far conservative operating and financial policies employed by most companies are keeping things on an even keel despite tougher conditions, particularly in natural resource sectors.

There are, however, two exceptions.

One is Canfor Pulp Products Inc (TSX: CFX, OTC: CFPUF). The pulp products company has now eliminated its dividend for the time being. That’s the last of a series of four reductions that started in January 2011, when the then income trust converted to a corporation.

Canfor’s dividend policy has always been aggressive, rewarding shareholders when business conditions were robust and cutting to the bone when they worsen. The recent slashing to zero follows a cycle that saw the company increase from a rate of a penny a month in November 2009 to a high of CAD0.25 in January 2011, topped off by a CAD0.30 special dividend.

That cycle followed a four-step reduction that commenced when the dividend was CAD0.18 a month in October 2007.

The elimination starting with the scheduled November payment is the first time in its brief history that Canfor has paid nothing. But it follows the boom-and-bust pattern, and once conditions do improve Canfor shareholders will benefit almost immediately with a restored dividend.

Timing is highly uncertain. The company swung to a loss in the third quarter of 2012, as revenue slid 15.7 percent from the prior quarter, 24 percent from the year-ago period.

Management noted “downward pressure on prices” and sales were also affected by extended scheduled maintenance outages at a major facility. The good news is the downtime was for upgrades that will improve future efficiency, widening the company’s competitive advantage as a low-cost producer of pulp products.

My advice for some time has been to hold the stock, on the basis that while the dividend may be cut further there’s still value in the enterprise. That’s still my view, though the lack of dividend now may try the patience of some. Canfor Pulp Products is a hold.

The other dividend cutter this month is a closed-end mutual fund we track in How They Rate, Aston Hill VIP Income Fund (TSX: VIP-U, OTC: BLUBF).

Aston Hill has long paid out more in distributions than its holdings were generating in dividend income. The cut is simply recognizing that fact and was already reflected in the fund’s price.

Management has made the 35.7 percent reduction more palatable by accompanying it with a bid to buy back up to 10 percent of fund shares.

My advice is there are better funds available to switch to. But with the cut in hand, Aston Hill VIP rates a hold and is off the Watch List.

Here’s the rest of the Dividend Watch List. I’ve noted companies that have reported third-quarter results below.

AvenEx Energy Corp (TSX: AVF, OTC: AVNDF) won’t reveal how it did in the third quarter until at least Nov. 14. But with management now attempting to shop assets and possibly the whole company, I’m not expecting good news in the numbers.

A consensus of analysts polled by Bloomberg still forecasts a dividend cut to a monthly rate of CAD0.02 per share. Sell.

Bonavista Energy Corp’s (TSX: BNP, OTC: BNPUF) third-quarter results weren’t as bad as they might have been, considering the weakness in natural gas liquids prices.

The payout ratio was still moderate at 75 percent of distributable cash flow, despite a 26 percent drop in realized selling prices for NGLs. But the 43 percent decline in funds from operations per share and accompanying 9 percent slide in production are nonetheless causes for concern.

I still recommend the stock for those who want exposure to a recovery in NGLs. But this is certainly not a stock for the risk averse or for those who can’t stomach the risk of a dividend cut next year. Buy under USD18.

Chorus Aviation Inc (TSX: CHR/B, OTC: CHRVF) will report third-quarter earnings on Nov. 13 that are likely to cover the current dividend.

The problem is the dispute with Air Canada Inc (TSX: AC/A, OTC: AIDIF) is not going management’s way, and the parent is moving business to rivals.

This is one sweet yield that looks likely to bring sour consequences sooner or later. Sell.

Data Group Inc (TSX: DGI, OTC: DGPIF) will likely report earnings later this month that continue to support the dividend, which may or may not help the stock.

All we really do know is that Data Group is definitely pricing in a huge cut already, which limits downside. Hold.

Enerplus Corp (TSX: ERF, NYSE: ERF) has been selling what it calls “non-core” assets at a rapid rate, unloading its light oil assets in Manitoba this month in a CAD220 million deal.

That will help the company avoid tapping further into its credit lines. But it also means less production, even as margins are squeezed by lower selling prices.

Neither is reflected in Enerplus’ current share price. Sell.

EnerVest Energy & Oil Sands’ (TSX: EOS, OTC: EOSOF) portfolio includes many stocks that are solid in their own right.

But the closed-end fund is paying out a dividend that’s not generated by investment income. Sell.

FP Newspapers Inc (TSX: FP, OTC: FPNUF) will announce earnings Nov. 15. And though management is obviously incentivized to maximize the cash payout, the numbers are likely to make it a lot harder to come up with the money to pay for it. Sell.

Freehold Royalties Ltd (TSX: FRU, OTC: FRHLF) management previously warned that it will “revisit” the company’s distribution rate next year. Weaker oil prices this fall make it much more likely this will happen.

The stock is already pricing in a cut but there are better energy plays. Hold.

GMP Capital Inc (TSX: GMP, GMPXF) is innovative, as a recent deal to help Athabasca Oil Corp (TSX: ATH, OTC: ATHOF) issue bonds demonstrates.

But it’s hard to see how conditions have improved enough for the investment bank’s earnings to cover the dividend in the third quarter. And barring that a cut seems inevitable by next year. Hold.

Labrador Iron Ore Royalty Corp (TSX: LIF-U, OTC: LIFZF), now converted to a corporation, suffered a 41 percent drop in third-quarter royalty income but still expects a rebound next year as the impact of an expansion at its facility flows through to cash flow.

That will be critical to the dividend, with the current payout ratio 134 percent. Hold.

New Flyer Industries Inc (TSX: NFI, OTC: NFYED) isn’t going to go into bankruptcy, and the bus manufacturer is still winning some orders.

That being said, New Flyer still faces some of its most difficult operating conditions ever, and it’s going to be tough to cover the current dividend. Sell.

Precious Metals & Mining Trust’s (TSX: MMP-U, OTC: PMMTF) object lesson is that if you want to own a basket of mining stocks, you’re far better off buying individual companies. That’s because the fund trades at a 12.7 percent premium to the value of its assets, as investors have chased it for yield.

For every dollar you invest, you’re getting barely 83 cents of assets. And not a penny of the distribution has been supported by investment income this year. Sell.

Ten Peaks Coffee Company Inc’s (TSX: TPK, OTC: SWSSF) third-quarter earnings, which will be announced on or about Nov. 19, will likely by negatively impacted by a strong Canadian dollar and volatile coffee prices.

The best advice is to stand clear and avoid another cut to the dividend, which has already been reduced by more than 80 percent from its July 2002 initial public offering. Sell.

Zargon Oil & Gas Ltd (TSX: ZAR, OTC: ZARFF), a small oil and gas producer, just cut its dividend in half. And third-quarter results don’t leave a lot of room for optimism about the future either.

Per-day oil and gas liquids production sank 6 percent, while natural gas output fell 12 percent from year-earlier levels. That was due to shut-ins as management dealt with lower selling prices.

Curtailing output did apparently have the benefit of reducing operating costs to CAD15.34 per barrel of oil equivalent. But funds from operations excluding items still fell 2 percent and cash from operating activities tumbled 12 percent.

Although the payout ratio of 37.5 percent certainly appears more manageable, that’s mainly because of the dividend cut. Put simply, there are easier places to make money in oil and gas. Hold.