Among the bright spots for Honeywell are aerospace, where the company plays in the mid- to large-size business jet market, along with its performance materials and refining businesses. Cote detailed Honeywell's modular refining products for oil shale drillers, which offers on-site oil and gas processing in as little as a one acre site, and the equipment can be constructed in as little as 60 to 90 days. That market, he said, is growing worldwide.

Other areas of opportunity for Honeywell include energy conservation, where Cote said many buildings can still save 20% to 25% on their energy bills just by using the latest HVAC and insulating technologies.

Finally, when asked about Cote's efforts to reform Washington with, Cote said there are now over 100 CEOs participating in the initiative. If everyone works together, our nation's debt problem can be solved, he said.

Expectations and Reality

Earnings season is all about expectations, Cramer reminded viewers as he highlighted what happens when a company surprises to the upside and what happens when expectations far exceed reality.

Shares of General Electric ( GE) popped 2.3% when it reported a quarter where sales were essentially flat. How can that happen? Cramer said it's because stocks trade on expectations, and those for GE were tepid at best.

Everything at GE ticked in the right direction this quarter, Cramer explained. Sales in Europe were a little better and the company's margins expanded slightly. More important, GE continues to scale back its GE Capital division, which once just served as a financing option for its expensive industrial goods, but recently became not only a sub-prime lender but also a big landholder in off all places, Europe.

Cramer said the scaling back of GE Capital has not only been a big mental boost for the company and its shareholders, but it's also allowed GE to get back to what it does best -- aerospace, power generation, locomotives, health care, oil and gas and more.

But just as companies can soar on lowered expectations, they can also plummet on soaring ones. That was the case with Stanley Black & Decker ( SWK), which saw its shares fall 14% after its earnings popped on what was essentially a tax gain. Deep inside the numbers were weakness in Stanley's security division and its government sales, both of which were thought to be only a small percentage of sales.

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