Eaton (NYSE:ETN) CEO Sandy Cutler was largely upbeat during his company's third quarter conference call. And overall he had a right to be. However, he invoked the image of A Tale of Two Cities to describe the world Eaton is operating in. That suggests the industrial giant's U.S. results could be hiding trouble everywhere else.

Where it counts

Eaton's biggest business is its electrical segment, which includes both its Electric Products and Electrical Systems & Services areas. Sales were up 3% and 1%, respectively, in these groups. Operating profits advanced 10% and 3%. Together these two businesses represent roughly 60% of Eaton's revenues, so it's good to hear that things are going reasonably well.

Source: ko:User:Hoenny, via Wikimedia Commons

And, according to Cutler, some of the strongest growth is coming from newer technologies. For example, "lighting continues to be an area of continued strength," he said, with LEDs accounting for 45% of total lighting revenue.

Smaller, but doing really well

Another standout that Cutler wants you to know about is the Aerospace business: "[R]eally a terrific quarter in aerospace," was how he described it. But the full strength in the segment was actually hidden by divestitures the company made. According to the CEO: "[T]he core growth was 6%, you see right the divestiture is 6%." So, the overall sales growth came in basically flat, even though the core business is performing strongly.

The real excitement, however, is probably the future: "[B]ookings [were] up some 12% and had both positive bookings on both the commercial and the military side of the business." That means next year will likely be fairly strong, too. That said, this segment accounts for less than 10% of sales, so it isn't the biggest contributor. At least right now. With the CEO highlighting it, it's worth watching for both continued growth and potential acquisition activity in aerospace.

Not all good news

So electrical was solid, aerospace was strong, and Cutler also had positive things to say about the auto segment (a little under 20% of sales). Overall, the third quarter was largely good news. The notable weak spot was the hydraulics business (around 10% of sales), where sales were flat, operating profit was down 6%, and bookings fell 6%.

Cutler described it as "another challenging quarter in hydraulics." The standout problem here is the agriculture sector. For example, overall bookings fell 6% in the hydraulics segment with orders from original equipment manufacturers (OEMs) being the big issue, down 19%. But Cutler explains that agriculture was the biggest drag because, "All our other OEMs are up some 6% and that includes the global construction market."

Notably, "We've tried to be quite transparent that we think that next year will be a down year in ag equipment as well." So as you watch for strength in the aerospace arena, keep a close eye on the hydraulics business, paying particular attention to agriculture sales.

A tale of two cities

The one theme that ran throughout Cutler's talk, however, was what the CEO called a "tale of two cities." Essentially, "[S]trong conditions here in the U.S. as the U.S. continues to strengthen and then weaker conditions as we get outside the U.S.," he said. With roughly half of the company' sales coming from the United States, it's nice to hear the CEO say, "[W]e're doing quite well in our businesses here in the U.S."

The only problem is the other half of the business and what the future looks like outside the United States. On that front, Cutler's not quite so sanguine. "[W]e think market growth is likely to be similar to 2014, I think the big trends there are continuing growth in the U.S. and lower growth outside of the U.S."

What's that mean? For 2014, Eaton said, "[F]ull year market growth is likely to be around 2% where the U.S. market is growing at an attractive 3% level and the rest of the world growing at more like 1%." That should leave a bit of a bad taste in your mouth, even though the quarter was decent overall. And should the United States start to cool off, Eaton's results could weaken quickly.

So, you should like what the quarter offered overall, but be a little concerned about what the future holds for this global industrial player. If the slowing global economy takes the U.S. with it, the tale of two cities will become a tale of one city, and that city will be in a bad way. That isn't to suggest you should dump out of Eaton, but that the U.S. may or may not be enough to carry the company through to brighter times. It's a risk to keep in mind.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.