Altria's third-quarter earnings report highlighted the tobacco category's resiliency during the pandemic. With consumers spending less on gas and entertainment, plus having more opportunities to smoke while working from home, U.S. cigarette volumes increased last quarter for the first time in years. Similarly, Altria's volume declines continued moderating from a 7% loss in early 2019 to a 1% dip last quarter.  Management now expects industry volumes this year to be flat to down 1.5%. For comparison, Altria was projecting a 4% to 6% decline at the start of the year.

Exxon maintained its dividend for the fourth quarter despite reporting another set of weak earnings results this morning. While Exxon's operating cash flow improved from $0 in the second quarter to $4.4 billion last quarter, the firm remained far from covering its capital expenditures ($3.8 billion) and dividend ($3.7 billion). Despite this ongoing cash flow deficit, management's 2021 capital allocation priorities have not changed and include "paying a reliable dividend." In order to support its capital allocation plans and the dividend, Exxon said it expects and needs its businesses next year to get back to the bottom of their 10-year ranges for pricing and margins. As you can see, the pandemic has caused all of Exxon's businesses to uncharacteristically experience pricing and [...]

Omnicom reported earnings on October 27. Organic revenue fell 12% as clients in struggling industries such as auto (10% of sales), retail (7%), travel and entertainment (5%), and energy (1%) reduced their marketing spending. Source: Omnicom Earnings Presentation Omnicom's sales decline was better than the company's 23% slump in the second quarter. But investors were disappointed by management's remarks that a similar pace of sequential improvement is not expected to continue in the fourth quarter. Omnicom usually benefits from a jump in more discretionary project-based business near the end of the year, but visibility is very low due to COVID's effect on many marketing budgets. 

Valero reported earnings on October 22, recording its second straight quarterly loss as the refining industry continues to be upended by the pandemic. Valero's refineries process crude oil into gasoline, diesel, jet fuel, and other products. With fewer people flying and driving during the virus outbreak, fuel demand remains around 15% below pre-crisis levels. Meanwhile, Valero's feedstock costs have lost some of their advantage. Many of Valero's assets are located around the U.S. Gulf Coast where domestic energy production grew faster than takeaway capacity for most of the past decade. Given its close proximity to this abundant source of landlocked supply, Valero could buy oil at a discount compared to benchmark crude oils such as WTI and Brent.