In the Commercial Products side we’ve seen modest sales improvement over the course of 2014 which we expect to continue into 2015 with better growth in the US driven by improvement in the ECC and Fire Systems businesses.
In the industrial markets we’re expecting higher sales of industrial fire safety equipment, particularly in the Americas which represent about half of our exposure. Residential growth will continue particularly in the US where we’re accelerating our investments in the connected home space.
And in Building Solutions which is a longer-cycle business, sales growth has been muted year-to-date but we’re encouraged by the improvement in product orders and services backlog, which will benefit in 2015.
In PMT our robust orders growth and backlog position at both UOP and Process Solutions support growth acceleration. PMT continues to benefit from oil and gas investments occurring around the world. You’re probably aware we’re primarily focused on the midstream and downstream segments. These are less impacted in the near term than the upstream segments might be by any reduction in capital spending that could come from recent crude oil price declines.
In fact, most of our UOP and HPS backlogs will be executed over the next two or three years and are for projects where the bulk of our customer’s capital has already been spent. The risk of cancellations is low and is already reflected in our initial planning framework. Lower oil prices also mean lower fuel prices at the pump which drive more demand for refined products and production. This also plays to the strength of our portfolio.
Also we’re excited by the recent loosening of US restrictions on energy export and are well positioned to win new business in related verticals, like liquid natural gas. And last, in Advanced Materials we expect to continue to benefit from our Solstice products and higher production volumes in resins and chemicals.
Given the balance of these various dynamics we are encouraged about our prospects for 2015. We are in the middle of our annual planning process and look forward to providing you with more details regarding our 2015 guidance during our outlook call on December 16. You can expect that we will count on only modest sales growth and will stay conservative on costs so that we deliver earnings growth on a basis consistent with our five-year plan.
Let me wrap up on Slide 12.
The strong third quarter results came from every part of Honeywell. We have a solid and diverse portfolio and management team focused on execution. Combined, these enabled us to add to our performance track record as we exceeded our guidance on sales, margins and EPS. With one quarter left to go we are confident in our ability to continue outperforming despite the continued slow growth macro environment.
We’re going to continue investing in our future with a focus on profitable sales growth. This means investing in high ROI CapEx, in new product development, and in sales and marketing resources particularly in high-growth regions. The investments are paying off; you can see it in the results.
As we turn our attention to 2015 we recognize the uncertainty in the macro environment but this is not new for us. We have and will continue to plan conservatively. Also we’re confident that our portfolio is well positioned for continued outperformance. Our order trends, both short- and long-cycle point to accelerated sales growth for next year that should enable continued strong improvements in our profitability. And we will continue to execute to deliver 2014, ’15, and beyond.
So with that, Elena, let’s go to Q&A.
Elena Doom
Thanks, Tom. Leo, we will now take our first question.
Question-and-Answer Session
Operator: (Operator instructions) Our first question is coming from Scott Davis of Barclays.
Scott Davis – Analyst, Barclays Capital
Hi, good morning guys. Thanks for helping the market go up today. We needed it.
Dave Cote: Yeah, I agree.
Scott Davis – Analyst, Barclays Capital
I’ve got to give you crap about something, Dave – you know I can’t go a conference call without criticizing you. But 16 slides and not a word on M&A or buybacks or any cash reinvestment. You’ve had a nice pull back here, I mean what’s holding you back from buying back some shares?
Dave Cote: Well, first of all I don’t think that we ever provide a chart commenting on that so it’s not unusual.
Scott Davis – Analyst, Barclays Capital
No, I know.
Dave Cote: I guess 19%, 14% depending upon how you want to look at it doesn’t suffice, so I understand. But at the end of the day our strategy’s still the same, it’s to stay opportunistic on both the M&A side and the share repurchase side, and I think M&A conditions are starting to improve with the kind of pullback we’ve seen. So who knows how things develop, I’m not promising anything. You never know where things are going to go but at the end of the day times are getting better to buy, so we’ll see what happens.
Scott Davis – Analyst, Barclays Capital
Dave, what is the ideal size of transactions? I mean in the past you’ve done some pretty interesting deals and some of them a little bit big. Would you be willing to go a little larger in size where there’s some value now?
Dave Cote: Well you know, I’ve always said I never say never on doing anything large, so we’ll say I don’t know, $5 billion to $10 billion. But at the end of the day we’ve never done it either – it doesn’t mean we won’t but I’ve never done it. We still continue to maintain a very active pipeline of projects from small stuff to big stuff and we’re going to keep doing that, and who knows? Maybe someday something bigger strikes. In the meantime we still keep looking at stuff that’s more bite-size, more manageable. And it’s tough to predict where these things go. As Anne Madden keeps reminding us, you kiss 100 frogs to find, I guess, in my case the princess. So it’s just one of those things that we’re going to keep looking at and keep working.
Scott Davis – Analyst, Barclays Capital
And just lastly non-res has been a bit of a mystery this year but it looks like you made some positive commentary there.