Aerospace and defense specialist Honeywell (NYSE:HON) proved all is well in its world yesterday, turning in solid second-quarter results. For the quarter, the company earned $611 million, or $0.78 a share, which is 17.3% more than the $521 million, or $0.63 a share, a year ago. Net sales for the quarter rose 8.1% to $8.54 million, and free cash flow edged up 4.3% to $820 million.

The primary driver for Honeywell's showing was its big aerospace segment, which improved its revenues 12.7% to $3.03 billion, while the automation and control unit grew just under 10% to $3.04 billion. The two smaller segments -- specialty materials and transportation systems -- checked in with a 3% decline and a 5.3% growth in revenues, respectively. The company also bought back 40 million shares of stock during the quarter, reducing the amount remaining under its previous authorization to about $200 million. But as boards of directors will do, Honeywell's has anted up another $3 billion for buybacks.  

I find that Honeywell and its two primary competitors, Raytheon (NYSE:RTN) and United Technologies (NYSE:UTX), are all solid companies, with only the slightest of differing metrics to set them apart. For instance, of the three, Raytheon sports the lowest forward (December 2007) P/E at about 18.0 times, while United Technologies is just under 18.5 times, and Honeywell is crowding 20 times.

At the same time, Honeywell and United Technologies both offer returns on equity of more than 21%, compared to Raytheon's figure, which is about half as high. And with its lower return on equity, Raytheon's debt level is easily the lowest of the three.

All in all, I'm convinced that Fools would be wise to familiarize themselves thoroughly with this sector -- which also includes Northrop Grumman (NYSE:NOC) and Boeing (NYSE:BA). The way our world is working, the importance of the aerospace and defense sector, in particular, is unlikely to diminish, and I think all of these companies merit careful study, analysis, and potentially the commitment of some Foolish investment funds.

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Fool contributor David Lee Smith does not own shares in any of the companies discussed. He welcomes your questions or comments. The Motley Fool has a disclosure policy.