The controls field is benefiting from the U.S. economy's strong performance in 1999's first half and its ongoing expansion and investors are renewing their confidence in the industry, which had been keeping up with the stock market until it fell behind in 1Q99. Controls played catch up in 2Q99 as the CE Stock Index increased 21%, while the Dow Jones increased 12%. The other stock indexes shown here increased approximately 7% during this period.

Meanwhile, controls industry earnings per share (EPS) were down about 3% on average in 2Q99 compared to 1Q99, though this index can be swayed by the performance of its larger companies. For example, Rockwell International posted -$1.71 EPS for 12 months ending in 2Q99. Despite a second-quarter year-to-year gain, this was the fourth quarter in which Rockwell's 12-month EPS declined. Rockwell reported fiscal 2Q99 EPS of 74 cents, a 23% increase over fiscal 2Q98.

The CE Market Value Index demonstrated significant improvement, though its results appear flat for 2Q99. Here again, large companies have a magnified effect on the index. Honeywell, for instance, gained 53% over the previous quarter. Rockwell posted a 44% gain in market value for the period.

The big-fish-eating-the-little-fish-syndrome continues to affect the controls industry as it does many others. Indexes for 3Q99 will reflect a different hue when Honeywell is replaced by a 'new Honeywell.' Though the old Honeywell is being bought by Allied Signal, the new firm will retain the Honeywell name.