Ah, earnings season . I hope someone enjoys it. For my part, I'm not really thrilled with the concept. A couple of weeks back, burned out from writing way too much about way too many companies' fiscal Q3 reports, I flopped on the couch and flipped on CNBC to enjoy a few minutes of mindless ticker-tape gazing. Although I rarely pay much attention to the talking heads, one comment did jump out at me, and I quote (yes, it was memorable enough that I can do this verbatim): "Over 1,300 companies are reporting earnings this week."

!

1,300 companies? Simultaneously? (More or less.)

So I guess that explains why it's taken me until now to find time to write a bit about Honeywell's (NYSE:HON) happy news. As with most companies this month, it was Q3 that Honeywell wanted to talk about. But by now, you already know all about those quarterly results: 15% sales growth, 22% improvement in diluted earnings per share, and free cash flow up 17% from last year's Q3. So let's add some value here, folks. Rather than go over the quarter that was, as others (and we, too) have already done, let's take a step back and see how Honeywell's doing for the year to date, in comparison with Qs 1 to 3 2005.

So far this year, Honeywell has:

  • Posted better than 13% sales growth, booking $23.1 billion in revenue over three quarters.
  • Kept its cost of goods sold (COGS) down to just 11% growth.
  • Successfully restrained the growth of selling, general, and administrative costs to less than 13%.

As you may recall from our pre-earnings Foolish Forecast, this is exactly what we were hoping to see out of Honeywell. The slower-than-sales-growth rise in COGS boosted trailing-12-month gross margin 120 basis points from this time last year. And thanks to the newfound restraint in operating costs, the firm was able to keep almost the full benefit of those lower input costs and expand its operating margin to 8.7%.

Best of all has been the improvement in free cash flow (FCF). Through a combination of 23% improvement in operating cash flow and a 5% decrease in capital expenditures, Honeywell generated 34% greater cash profits in comparison with last year. With $1.5 billion in FCF under its belt already, and trending toward $2 billion for the year, the stock now trades for just 17 times FCF -- slightly cheaper than the average S&P 500 company. Meanwhile, it's growing its profits, and free cash flow, at about twice the rate of the average S&P 500 company.

Those numbers make for a pretty compelling "buy" thesis if you ask me. All that remains to be seen is: How long can the company keep this growth up before the Honeywell starts to run dry?

For more Foolishness on Honeywell, read:

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Fool contributor Rich Smith does not own shares of any company named above. The Fool's disclosure policy catches more flies with honey than with vinegar.