Most of the industrial bellwethers have reported mixed results for the fourth quarter of 2015.

Amidst global growth slowdown, while a few have managed to report better-than-expected fourth-quarter earnings, most of them have reported a year-over-year decline in revenue.
 
Revenue weakness was widespread among the industrial players. The blame goes largely to the stronger dollar as most of these companies have significant international exposure resulting in an unfavorable currency impact. The woes intensified thanks to reduced spending, plunging prices for crude oil and persistent China troubles.
 
Below we have highlighted in greater detail earnings of some of the major industrial companies which really drive this sector’s outlook.
 
Industrial Earnings in Focus
 
General Electric Company (GE)
 
Diversified industrial conglomerate General Electric posted mixed fourth quarter results as it beat on earnings but missed on revenues. The company’s earnings came in at 52 cents per share, up 27% from the year-ago figure and ahead of the Zacks Consensus Estimate by 2 cents. Shares of the company fell slightly after the earnings release.
 
Revenues were up 1% to $33.9 billion, missing the Zacks Consensus Estimate of $35.9 billion.  The adverse impact of falling energy prices was evident in GE's large oil and gas business. GE has undertaken a major restructuring initiative to cut costs (read: Industrial ETFs in Focus on GE Mixed Q4 Results).
 
3M Company (MMM)
 
Another major conglomerate, 3M Company reported earnings of $1.80 per share for fourth-quarter 2015, beating the Zacks Consensus Estimate of $1.62. Net sales during the quarter were $7.3 billion, down 5.4% year over year but ahead of the Zacks Consensus Estimate of $7.2 billion. The year-over-year decrease in sales was largely due to a significantly negative foreign currency translation impact. 3M shares gained on the day of its earnings release.
 
Honeywell International Inc. (HON)

Honeywell International’s earnings per share of $1.58 in the reported quarter missed the Zacks Consensus Estimate of $1.59. Revenues in fourth-quarter 2015 decreased 3% year over year to $10 billion, broadly in line with the Zacks Consensus Estimate. Despite the challenging macroeconomic environment, Honeywell reiterated its 2016 guidance. The company anticipates earnings in the range of $6.45 per share and $6.70 per share on revenues of $39.9 billion and $40.9 billion. Shares of the company have been on a downtrend since its earnings release on January 29.
 
Union Pacific Corporation (UNP)
 
The rail transportation operator, Union Pacific reported fourth-quarter 2015 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.42. Earnings declined 19% on a year-over-year basis.
 
Revenues decreased 15% year over year to $5.2 billion in the fourth quarter, falling short of the Zacks Consensus Estimate of $5.54 billion. A 16% decline in freight revenues hurt the top line. Declining coal shipments weighed on the railroad operator’s results yet again. The stock tumbled after reporting disappointing results.
 
ETF Impact
 
Given mixed results, many industrial stocks managed to hold up gains over the past 10 days, sending the related ETFs higher. This has put the spotlight on industrial ETFs. Below we discuss four of these ETFs having a sizeable exposure to the above stocks (see all Industrial ETFs here).
 
Industrial Select Sector SPDR Fund (XLI)
 
This product tracks the Industrial Select Sector Index. General Electric occupies the top spot with 11.7% allocation, while 3M, Honeywell and Union Pacific have a combined exposure of roughly 14.4% in the fund. XLI has garnered $5.7 billion in assets and trades in a heavy volume of 13.9 million shares per day. It has a low expense ratio of 0.14%. The fund has highest exposure to Aerospace & Defense (28%), followed by Diversified Industrials (22%). The product gained 3.4% in the past 10 days and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
 
Vanguard Industrials ETF (VIS)
 
This fund follows the MSCI US IMI Industrials 25/50 index and holds about 346 securities in its basket. Of these firms, GE occupies the top position with 11.8% share, while 3M, Honeywell and Union Pacific together comprise more than 10% of the fund’s assets. The fund manages nearly $2 billion in its asset base and charges only 12 bps in annual fees. From industry perspective, the fund has highest exposure to Aerospace & Defense (24%), followed by Diversified Industrials (21%). Volume is moderate as it exchanges roughly 125,000 shares a day on average. The product returned 3.1% in the past 10 days and currently has a Zacks ETF Rank #3 with a Medium risk outlook.
 
iShares U.S. Industrials ETF (IYJ)
 
IYJ tracks the Dow Jones U.S. Industrials Index to provide exposure to 212 U.S. companies that produce goods used in construction and manufacturing. General Electric occupies the top spot in the fund with 11.5% share while 3M, Honeywell and Union Pacific have a combined exposure of almost 10%. The ETF manages an asset base of $517 million and trades in an average volume of 68,000 shares. The fund has top exposure to Aerospace & Defense (21%) and Diversified Industrials (19%). The fund is slightly expensive with 43 basis points as fees. It rose almost 3.4% in the last 10 days and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Beat U.S. Manufacturing Woes with These Industrial ETFs).
 
Fidelity MSCI Industrials Index ETF (FIDU)
 
This fund tracks the MSCI USA IMI Industrials Index, holding 344 stocks in its basket. General Electric takes the top spot at 13.3% share while 3M, Honeywell and Union Pacific have a combined exposure of almost 12%. The product has amassed $99.3 million in its asset base while trades in moderate volume of nearly 104,000 share a day on average. The fund has top exposure to Aerospace & Defense (24%) and Diversified Industrials (22%). It is one of the low cost choices in the space charging 12 bps in annual fees from investors. The fund gained 3.3% in the last 10 days and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.