One Honey(well) of a Quarter

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Having watched the phenomenon called "globalization" hit full force in recent years, and with two teenagers preparing for college, I'm doing everything I can to nudge them both toward majors in international business. Honeywell (NYSE: HON), along with such other big, U.S.-based companies as Caterpillar (NYSE: CAT) and DuPont (NYSE: DD), lately have only strengthened my belief about this.

As last week came to a close, Honeywell told us that it had ridden strength abroad to earnings of $689 million in its final 2007 quarter, up nearly 18% from the $585 million it brought home a year earlier. On a per-share basis, with $4 billion in repurchases during the year, its results expanded by more than 26%.

All of the New Jersey-based company's operating units contributed to the strong quarter. Automation and controls, the biggest revenue generator, increased its sales by 13% and its profit contribution by 10%. It's closest rival, aerospace, raised its sales by 11% but saw its profits grow by 14%.

The question of the month is whether a slowing U.S. economy will infect the likes of China, India, and the Middle East, all of which have been solid for Honeywell. Regarding that specific possibility, CEO David Cote observed during the company's post-release conference call that "everything still looks pretty fine."

All this leads me to two distinct conclusions:

• I'm inclined to provide a prominent place for Honeywell in the list I'm building of companies that are benefiting from overseas strength. This contention is only augmented by the company's forward P/E ratio below 14 and its 1.8% dividend yield.
• I'll be carefully watching other U.S.-based international players for their thoughts on overseas economies, especially those of the developing nations. For instance, 3M (NYSE: MMM) reports tomorrow, and Deere (NYSE: DE) will come forward in mid-February. Their analysis of the global picture will be an especially important addition to Honeywell's thoughts.

For related Foolishness:

• Emerging Markets Boosting DuPont
• Caterpillar Is Still a Butterfly
• Cemex Flexes Its International Muscle