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               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549
                            FORM 10-Q

     (Mark One)

     [X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the quarterly period ended November 30, 2004 or

     [ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the transition period from _____ to _____

                 Commission File Number: 0-9061

                    ELECTRO RENT CORPORATION
      Exact name of registrant as specified in its charter

         CALIFORNIA                         95-2412961
(State or Other Jurisdiction             (I.R.S. Employer
of Incorporation or Organization)       Identification No.)

                    6060 SEPULVEDA BOULEVARD
                 VAN NUYS, CALIFORNIA 91411-2501
      (Address of Principal Executive Offices and Zip Code)

                          818 786-2525
      (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X    No

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X   No

The number of shares outstanding of the registrant's common stock
as of December 6, 2004 was 24,936,400.

                            Page 1

                    ELECTRO RENT CORPORATION

                            FORM 10-Q

                        NOVEMBER 30, 2004

TABLE OF CONTENTS                                           Page

Part I: FINANCIAL INFORMATION                                  3

Item 1. Financial Statements                                   3

Condensed Consolidated Statements of Income for the Three      3
Months and Six Months Ended November 30, 2004 and 2003
(Unaudited)

Condensed Consolidated Balance Sheets at                       4
November 30, 2004 and May 31, 2004 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the        5
Six Months Ended November 30, 2004 and 2003 (Unaudited)

Notes to Condensed Consolidated Financial Statements           6
(Unaudited)

Item 2. Management's Discussion and Analysis of               13
Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures              24
About Market Risk

Item 4.  Controls and Procedures                              24

Part II: OTHER INFORMATION                                    25

SIGNATURES                                                    27

                            Page 2

Part I.  FINANCIAL INFORMATION
--------------------------------
Item 1. Financial Statements

                              ELECTRO RENT CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   (Unaudited) (000's omitted except per share data)

                                  Three Months Ended    Six Months Ended
                                     November 30,          November 30,
                                   2004       2003       2004       2003
                                 ---------- ---------- ---------- ----------

Revenues:
  Rentals and leases             $  21,031  $  18,628  $  40,639  $  35,309
  Sales of equipment
    and other revenues               6,466      5,533     12,477     11,549
                                 ---------- ---------- ---------- ----------
    Total revenues                  27,497     24,161     53,116     46,858
                                 ---------- ---------- ---------- ----------
Operating expenses:
  Depreciation of rental
    and lease equipment              8,466      7,676     16,491     15,737
  Costs of revenues other
    than depreciation of
    rental and lease equipment       3,235      3,487      6,395      7,252
  Selling, general and
    administrative expenses          7,171      9,732     14,556     17,557
                                 ---------- ---------- ---------- ----------
    Total operating expenses        18,872     20,895     37,442     40,546
                                 ---------- ---------- ---------- ----------
Operating profit                     8,625      3,266     15,674      6,312
Interest and investment
  income, net                          304        412        562        833
Income from litigation
  settlement                             0          0      1,758          0
                                 ---------- ---------- ---------- ----------
Income before income taxes           8,929      3,678     17,994      7,145

Income taxes                         2,703      1,016      6,141      2,358
                                 ---------- ---------- ---------- ----------
Net income                       $   6,226  $   2,662  $  11,853  $   4,787
                                 ========== ========== ========== ==========
Earnings per share:
  Basic                              $0.25      $0.10      $0.48      $0.19
  Diluted                            $0.25      $0.10      $0.47      $0.19

Shares used in per
  share calculation:
  Basic                             24,917     24,863     24,909     24,843
  Diluted                           25,295     25,029     25,195     24,946

                              See accompanying notes to
                    condensed consolidated financial statements.

                                      Page 3

                              ELECTRO RENT CORPORATION

                        CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Unaudited)(000's omitted)

                                       ASSETS

                                                      November 30  May 31,
                                                          2004       2004
                                                       ---------- ----------

Cash and cash equivalents                              $  16,953  $  29,692
Marketable securities                                     58,875     52,475
Accounts receivable, net of allowance for
   doubtful accounts of $879 and $1,157                   11,239      8,095
Rental and lease equipment, net of accumulated
   depreciation of $141,895 and $143,403                 108,305     96,346
Other property, net of accumulated depreciation and
   amortization of $11,938 and $11,547                    15,803     16,084
Other                                                      3,420      3,675
                                                       ---------- ----------
                                                       $ 214,595  $ 206,367
                                                       ========== ==========

                        LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Accounts payable                                     $   8,775  $  16,560
  Accrued expenses                                        11,472     11,000
  Deferred revenue                                         2,728      2,197
  Deferred tax liability                                  10,844      7,994
                                                       ---------- ----------
    Total liabilities                                     33,819     37,751
                                                       ---------- ----------
Shareholders' equity:
  Common stock                                            19,809     19,502
  Retained earnings                                      160,967    149,114
                                                       ---------- ----------
    Total shareholders' equity                           180,776    168,616
                                                       ---------- ----------
                                                       $ 214,595  $ 206,367
                                                       ========== ==========

                              See accompanying notes to
                    condensed consolidated financial statements.

                                      Page 4

                              ELECTRO RENT CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited) (000's omitted)

                                                         Six Months Ended
                                                           November 30,
                                                          2004       2003
                                                       ---------- ----------

Cash flows from operating activities:
  Net income                                           $  11,853  $   4,787
  Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                         16,939     16,230
    (Recapture) provision for losses
      on accounts receivable                                (194)       389
    Gain on sale of rental and lease equipment            (4,993)    (4,375)
    Income from litigation settlement                     (1,758)         0
    Deferred tax liability                                 2,850       (138)
    Change in operating assets and liabilities:
      Accounts receivable                                 (2,950)    (2,857)
      Other assets                                           230      1,174
      Accounts payable                                      (336)      (989)
      Accrued expenses                                     2,230      3,523
      Deferred revenue                                       531        207
                                                       ---------- ----------
      Net cash provided by operating activities           24,402     17,951
                                                       ---------- ----------
Cash flows from investing activities:
  Proceeds from sale of rental and lease equipment        10,344     10,456
  Payments for purchase of rental and lease equipment    (41,248)   (19,079)
  Purchases of marketable securities                      (6,400)   (10,000)
  Payments for purchase of other property                   (144)       (77)
                                                       ---------- ----------
      Net cash used in investing activities              (37,448)   (18,700)
                                                       ---------- ----------
Cash flows from financing activities:
  Proceeds from issuance of common stock                     307        979
  Payment for repurchase of common stock                       0       (614)
                                                       ---------- ----------
      Net cash provided by financing
        activities                                           307        365
                                                       ---------- ----------
Net decrease in cash and cash equivalents                (12,739)      (384)
Cash and cash equivalents at beginning of period          29,692    151,448
                                                       ---------- ----------
Cash and cash equivalents at end of period             $  16,953  $ 151,064
                                                       ========== ==========

                              See accompanying notes to
                    condensed consolidated financial statements.

                                      Page 5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (U.S. dollar amounts and shares in thousands,
                    except per share amounts)

Note 1: Basis of Presentation

The condensed consolidated financial statements included herein
have been prepared by Electro Rent Corporation without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). The condensed consolidated
financial statements include the accounts of Electro Rent
Corporation and its wholly owned subsidiaries, Genstar Rental
Electronics, Inc., and ER International, Inc. (collectively, the
"Company") as consolidated with the elimination of all
intercompany transactions. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant
to such SEC rules and regulations. Nevertheless, the Company
believes that the disclosures are adequate to make the
information presented not misleading. These condensed
consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto included
in the Company's latest Annual Report as found on Form 10-K. In
the opinion of management, all adjustments, including normal
recurring adjustments necessary to present fairly the financial
position of the Company with respect to the condensed
consolidated financial statements and the results of its
operations for the interim periods ended November 30, 2004, have
been included. Certain reclassifications have been made to prior
year amounts to conform to the 2004 presentation. The results of
operations for interim periods are not necessarily indicative of
results for the full year.

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could
differ from those estimates.

Note 2: Stock-Based Compensation

At November 30, 2004, the Company had four stock option plans,
which are described more fully in Note 11 in the Company's 2004
Annual Report on Form 10-K. The Company accounts for stock
options using the intrinsic value method under the provisions of
Accounting Principles Board ("APB") Opinion No. 25 and provides
proforma net income and proforma earnings per share disclosures
for employee stock option grants as if the fair-value-based
method, defined in Statement of Financial Accounting Standards
("SFAS") No. 123 (as amended by SFAS No. 148), "Accounting for
Stock-Based Compensation", had been applied. Had the Company
determined compensation cost based on the fair value at the grant
date for its stock options under SFAS No. 123, the Company's net
income would have been reduced to the pro forma amounts indicated
below for the three and six month periods presented:

                            Page 6

                                 Three Months        Six Months
                                     Ended              Ended
                                 November 30,       November 30,
                               ----------------   ----------------
                                 2004     2003     2004      2003
                                -------  -------  -------   -------
Net income, as reported          $6,226   $2,662  $11,853    $4,787

Deduct: Total stock-based
  employee  compensation
  expense determined
  under the fair value
  based method for all
  awards, net of
  related tax  effects             (284)    (253)    (564)     (500)
                                -------  -------  -------   -------
Proforma net income              $5,942   $2,409  $11,289    $4,287
                                =======  =======  =======   =======
Earnings per share:
  Basic, as reported              $0.25    $0.10    $0.48     $0.19
  Basic - pro forma               $0.24    $0.09    $0.45     $0.17

  Diluted, as reported            $0.25    $0.10    $0.47     $0.19
  Diluted - pro forma             $0.23    $0.09    $0.45     $0.17

The fair value of these options was estimated at grant date using
the Black-Scholes option pricing model with the following
weighted- average assumptions:

                                 Three Months   Six Months Ended
                                    Ended
                               ---------------- ----------------
                                Nov.     Nov.     Nov.     Nov.
                                 30,     30,      30,      30,
                                2004     2003     2004     2003
                               -------  -------  -------  -------
Average risk-free interest
  rate                             3.4%     3.0%     3.5%     2.6%
Expected dividend yield              0        0        0        0
Expected volatility               52.4     45.9     52.6     45.9
Expected life                      5.0      5.0      5.0      5.0

As described in Note 10 of this Quarterly Report on Form 10-Q, on
January 14, 2004 the Company paid a $99.5 million special
distribution to shareholders. As a result, the Board approved an
adjustment to the exercise price of all of our outstanding
options to take effect on the close of business on January 14,
2004. Consequently, 964,315 stock options with an average
exercise price of $11.95 were adjusted to 1,327,237 stock options
with an average exercise price of $8.48. In accordance with FIN
44, "Accounting for Certain Transactions involving Stock
Compensation an interpretation of APB Opinion No. 25," there was
no accounting consequence due to the changes made to the exercise
price or the number of shares other than future potential
dilution to shareholders because the aggregate intrinsic value of
each award immediately after the change was not greater than the
aggregate intrinsic value of the award immediately before the
change and the ratio of the exercise price per share to the
market value per share was not reduced.

                            Page 7

Note 3: Impairment of Assets

The carrying value of equipment held for rental and lease is
assessed when factors indicating an impairment are present.  The
Company recognizes impairment losses on equipment held for rental
and lease when the expected future undiscounted cash flows are
less than the asset's carrying value, in which case the asset is
written down to its estimated fair value.  There were no
impairment losses recorded during the six months ended November
30, 2004 and 2003.

Note 4: Noncash Investing and Financing Activities

The Company had accounts payable and other accruals related to
acquired equipment totaling $7,254 and $14,703 as of November 30,
2004 and May 31, 2004, respectively, and $8,956 and $6,243 as of
November 30, 2003 and May 31, 2003, respectively, which will be
paid in the following period.

Note 5: Capital Leases

The Company has certain customer leases providing bargain
purchase options, which are accounted for as sales-type leases.
Interest income is recognized over the life of the lease using
the effective interest method. The minimum lease payments
receivable and the net investment included in other assets for
such leases are as follows at:

                                              November     May
                                                 30,       31,
                                                2004      2004
                                               ------    ------
Gross minimum lease payments receivable        $ 585     $ 894
Less - unearned interest                         (30)      (53)
                                               ------    ------
Net investment in sales-type lease
  receivables                                  $ 555     $ 841
                                               ------    ------

Note 6: Restructuring Charge

Due to the prolonged downturn in our industry, in May 2003 the
Company restructured its business as part of its continuing
program to create efficiencies within its operations. In the
quarter ended May 31, 2003, the Company recorded restructuring
charges of $821 in selling, general and administrative expenses,
which included the following:

                            Page 8

     Reducing the Company's workforce by approximately 27
     employees, mainly in the Duluth, Georgia, warehouse and
     sales office, resulting in a severance charge of
     approximately $220.   Approximately $113 was paid in May
     2003, and the remainder was paid in the first quarter of
     fiscal 2004.

     Closing of the Duluth, Georgia, warehouse. Property and
     equipment that was disposed of or removed from operations
     resulted in a charge of $31 and consisted primarily of
     leasehold improvements, equipment and furniture and
     fixtures. In addition, we incurred a charge of $570
     associated with the lease related to the closed facility,
     which represents the fair value of the liability determined
     based on the remaining lease rentals, reduced by estimated
     sublease rentals. Amounts accrued (net of estimated sublease
     proceeds) related to the facility closure will be paid over
     the remaining lease term through May 2005.

                       Remaining     Cash       Remaining
                       Liability   Payments     Liability
                       Balances                 Balances
                         as of                    as of
                        May 31,                 November
                         2004                   30, 2004
                       --------    --------     --------
Lease commitments          $261      $(137)         $124
                       --------    --------     --------
                           $261      $(137)         $124
                       ========    ========     ========

Note 7: Segment Reporting

SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," establishes annual and interim reporting
standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and
major customers.  Under SFAS No. 131, the Company's operations
are treated as one operating segment.

Although the Company has only one operating segment, it has two
groups of similar products:  test and measurement (T&M) and data
products (DP) equipment.  The Company's equipment pool, based on
acquisition cost, comprised $201,643 of T&M equipment and $48,557
of DP equipment at November 30, 2004, and $193,029 of T&M
equipment and $46,720 of DP equipment at May 31, 2004.

Revenues for these product groups were as follows for the three
months ended November 30:

                            Page 9

                                     T&M        DP      Total
                                   --------  --------  --------
              2004
Rentals and leases                 $ 15,974   $ 5,057  $ 21,031
Sales of equipment and other
  revenues                            6,197       269     6,466
                                   --------  --------  --------
                                   $ 22,171   $ 5,326  $ 27,497
                                   ========  ========  ========
              2003
Rentals and leases                 $ 13,253   $ 5,375  $ 18,628
Sales of equipment and other
  revenues                            5,037       496     5,533
                                   --------  --------  --------
                                   $ 18,290   $ 5,871  $ 24,161
                                   ========  ========  ========

Revenues for these product groups were as follows for the six
months ended November 30:

                                     T&M        DP      Total
                                   --------  --------  --------
              2004
Rentals and leases                  $30,736    $9,903   $40,639
Sales of equipment and other
  revenues                           11,910       567    12,477
                                   --------  --------  --------
                                    $42,646   $10,470   $53,116
                                   ========  ========  ========
              2003
Rentals and leases                  $24,872   $10,437   $35,309
Sales of equipment and other
  revenues                           10,321     1,228    11,549
                                   --------  --------  --------
                                    $35,193   $11,665   $46,858
                                   ========  ========  ========

No single customer accounted for more than 10% of total revenues
during the first six months of fiscal 2004 and 2003.  In
addition, total foreign country customers and operations
accounted for no more than 10% of the Company's revenues and long-
lived assets for the same periods.

Note 8: Computation of Earnings Per Share

Following is a reconciliation of the denominator used in the
computation of basic and diluted EPS for the periods ended
November 30, 2004 and 2003:

                            Page 10

                                  Three Months       Six Months
                                      ended             ended
                                 ---------------  ---------------
                                  Nov.     Nov.     Nov.     Nov.
                                  30,      30,      30,      30,
                                  2004     2003     2004     2003
                                -------  -------  -------  -------
Denominator:
  Denominator for basic
    earnings per
    share-weighted average        24,917   24,863   24,909   24,843
    common shares outstanding
  Effect of dilutive
    securities-options               378      166      286      103
                                 -------  -------  -------  -------
                                  25,295   25,029   25,195   24,946
                                 =======  =======  =======  =======
Net income                        $6,226   $2,662  $11,853   $4,787
Earnings per share:
  Basic                           $ 0.25   $ 0.10   $ 0.48   $ 0.19
  Diluted                         $ 0.25   $ 0.10   $ 0.47   $ 0.19

Note 9: Commitments and Contingencies

The Company leases certain facilities under various operating
leases. Most of the lease agreements provide the Company with the
option of renewing its lease at the end of the initial lease
term, at the fair rental value, for periods of up to five years.
In most cases, management expects that in the normal course of
business facility leases will be renewed or replaced by other
leases.

The Company is subject to legal proceedings and business disputes
involving ordinary and routine claims. The ultimate legal and
financial liability with respect to such matters cannot be
estimated with certainty and requires the use of estimates in
recording liabilities for potential litigation settlements.
Estimates for losses from litigation are made after consultation
with outside counsel. If estimates of potential losses increase
or the related facts and circumstances change in the future, the
Company may be required to record either more or less litigation
expense. It is management's opinion that none of the open matters
at November 30, 2004 will have a material adverse effect on the
Company's financial condition or results of operations.

Note 10:  Extraordinary Distribution

On January 14, 2004, the Company paid an extraordinary
distribution of $4.00 per outstanding common share, which totaled
$99.5 million.  The record date for the extraordinary
distribution was December 16, 2003, and the ex-dividend date was
January 15, 2004.

Note 11:  Income From Litigation Settlement

On June 12, 2004, when all contingencies expired, the Company
recognized as other income $1,758 related to funds received from
a class action lawsuit.  The Company, as a purchaser of certain
products under warranty, participated as a member of the
plaintiff class.

                            Page 11

Note 12:  Income Taxes

Electro Rent Corporation regularly evaluates its tax risks as
required by Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 5.  The current quarter and
the corresponding period last year include reductions in the
accrued liability for income taxes of $655 and $400,
respectively, reflecting the expiration of specific risks related
to closed tax audit years.

                            Page 12

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following discussion addresses the financial condition of the
Company as of November 30, 2004 and the results of operations and
cash flows for the six month periods ended November 30, 2004 and
2003.  This discussion should be read in conjunction with the
Management's Discussion and Analysis section included in the
Company's 2004 Annual Report on Form 10-K (pages 5-11) to which
the reader is directed for additional information and the Risk
Factors set forth in Exhibit 99 to that Report.

General

The Company generates revenues through the rental, lease and sale
of electronic equipment, primarily test and measurement (T&M) and
personal computer-related (DP) equipment.  For the first six
months of fiscal 2005, 75.6% of rental and lease revenues were
derived from T&M equipment.  This percentage has been increasing
over the last four years as a result of a steady erosion of DP
rental and lease revenues related to declines in product purchase
prices and unit volume.  Rental revenues comprised 77.9% of
rental and lease revenue, which percentage has also been
increasing over the last four years due to a significant decline
in personal computer leasing activity through fiscal 2004, and
the increase in rental activity that began in fiscal 2004.

A large part of our test and measurement equipment portfolio is
rented or leased to Fortune 500 companies in the aerospace,
defense, electronics and telecommunications industries. We
believe that a large part of our test and measurement equipment
is used in research and development activities and that a
significant amount of this equipment is used in connection with
government-generated projects. We also rent equipment to
companies of various sizes representing a cross-section of
American industry.

The profitability of our business also depends in significant
part on controlling the timing, pricing and mix of purchases and
sales of equipment. We seek to acquire new and used equipment at
attractive prices that we feel we can make a profit from a
combination of renting and/or selling them. At times, we may
acquire equipment that we do not intend to rent, because we think
it can be more profitably sold. The sale of equipment, either
after acquisition or after it has been rented, can comprise a
significant portion of revenues and operating profit. To maximize
overall profit from the rental, leasing, and sales of equipment,
we manage our equipment pool on an on-going basis by analyzing
our product strategy for each specific equipment class in light
of that equipment's historical and projected life cycle. In doing
so, we must compare our estimate of potential profit from rental
with the potential profit from the product's immediate sale and
replacement with new or other equipment. In our analysis, we
assume depreciation and impairment of equipment based on
historical levels, although historical trends are not necessarily
indicative of future trends. Our overall equipment management is
complex and our product strategy can change during a product's
lifetime based upon numerous factors, including the U.S. and
global economy, interest rates and new product launches. Our
strategic equipment decisions are based on the following
fundamentals:

                            Page 13

   The acquisition cost for Electro Rent;

   Our estimates of current and future market demand for
rentals;

   Our estimates of current and future supply of product;

   The book value of the product after depreciation and other
impairment;

   Our estimates of the effect of interest rates on rental and
leasing fees as well as capital financing; and

   Our estimates of the potential current and future sale
prices.

If we are unable to accurately predict market trends, or if
demand for the equipment we supply declines, we can be left with
large lots of inventory that we are unable to rent or sell for a
profit. The Company assesses the carrying value of the equipment
pool on a quarterly basis or when factors indicating impairment
are present. When the U.S. and global economy began to rebound in
fiscal 2004, we saw increased demand for our equipment, and the
Company was able to sell equipment that was older and more fully
depreciated or that we had previously written down in years prior
to fiscal 2004. Due in part to these events, the Company
experienced greater than normal gross margins on equipment sales
in fiscal 2004 and 2005. We intend to maintain our equipment
management strategy, and, accordingly, we expect that gross
margins on sales will return to normal historical levels as older
and previously impaired equipment constitute a smaller percentage
of sales.

We measure our overall level of profitability with the following
metrics:

   Net income per diluted common share (EPS);

   Net income as a percentage of average assets; and

   Net income as a percentage of average equity.

PROFITIABLITY AND KEY BUSINESS TRENDS

In fiscal 2004 and 2005, we improved profitability with each
successive quarter. Lower selling, general and administrative
expenses, improved gross profit on equipment sales, higher asset
levels on rent, and higher rental yields led to this improvement.

During fiscal 2004, we began to focus on core T&M and DP markets.
Organic growth has been modest, consistent with the economic
environment. As a result, we have supplemented growth with the
March 2004 acquisition of a small disaster recovery business that
integrates well with our existing DP business but still
represents an insignificant contribution to revenues. Focused,
prudent growth continues to be a primary goal for fiscal 2005.

                            Page 14

Our profitability measurements are presented in the table below
for the six months ended November 30:

                                             2004     2003
                                             ----     ----
Net income per diluted share                $0.47    $0.19
Net income as a percentage of
  average assets                            11.3%     3.4%
Return on average equity                    13.6%     3.8%

After several years of declines, T&M rental and lease activity
steadily increased during fiscal 2004 and 2005, reflecting the
strengthening global economy. Although DP rental and lease demand
and rates continued to be soft in fiscal 2004, we are beginning
to see some improvement in fiscal 2005.

The amount of equipment on rent, based on acquisition cost,
increased from $97.5 million at November 30, 2003, to $108.5
million at November 30, 2004.  Acquisition cost of equipment on
lease increased from $35.9 million at November 30, 2003, to $41.2
million at November 30, 2004.  Overall utilization for the
Company's equipment pool, again based on acquisition cost,
increased from 57.8% at November 30, 2003, to 63.6% at November
30, 2004, which reflects increasing customer demand and the
Company's continued liquidation and write-off of under-performing
assets.  During the same period, monthly rental rates increased
by 8.3% but monthly lease rates decreased by 0.3%.  There were no
impairment losses recorded during the six months ended November
30, 2004 and 2003.

We believe that demand for rental electronic equipment should
further improve as the U.S. economy continues to recover.  Also,
increased defense spending on advanced weapons and intelligence
systems provide an opportunity for the Company.  Until demand
improves further, the Company will strive to operate the business
efficiently at the current activity level.

The following table shows the revenue and income trends over the
last five quarters (in thousands):

                                Three Months Ended
                                -------------------
                      Nov.    Aug.    May 31,  Feb.     Nov.
                       30,     31,              29,      30,
                      2004    2004     2004    2004     2003
                       (1)     (2)                       (3)
                     ------  ------   ------  ------   ------
Rentals and leases   $21,031 $19,608  $18,016 $16,943  $18,628

Sales of equipment
  and other
  revenues             6,466   6,011    5,670   6,623    5,533
Net income             6,226   5,627    3,916   3,281    2,662

                            Page 15

(1)  For the three months ended November 30, 2004, income taxes
were reduced by $655 due to a change in estimated liability.

(2) For the three months ended August 31, 2004, net income
included $1.8 million (pre-tax) related to funds received from a
class action lawsuit.

(3)  For the three months ended November 30, 2003, rentals and
leases included $1.2 million from the reversal of various
customer credits; selling, general and administrative expenses
included a $2.3 million accrual related to the retirement of the
Company's president; and income taxes were reduced by $.4 million
due to a change in estimated liability.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On a regular basis, management reviews these estimates
including those related to asset lives and depreciation methods,
impairment of long-lived assets including rental and lease
equipment and allowance for doubtful accounts. These estimates
are based on management's historical experience and on various
other assumptions believed to be reasonable under the
circumstances. Actual results may differ from these estimates
under different assumptions or conditions. Management believes,
however, that the estimates, including those for the above-listed
items, are reasonable.

Management believes the following critical accounting policies
affect the more significant judgments and estimates used in the
preparation of the Company's financial statements:

Asset lives and depreciation methods:  The Company's primary
business involves the purchase and subsequent rental and leasing
of long-lived electronic equipment.  Management has chosen asset
lives that it believes correspond to the economic life of the
related asset. Management has chosen depreciation methods that it
believes matches the benefit to the Company from the asset with
the associated costs. These judgments have been made based on
management's expertise in each equipment type that the Company
carries.  If the asset life and depreciation method chosen do not
reduce the book value of the asset to at least the estimated
future cash flows from the asset to the Company, the Company
would be required to record a loss on revaluation.  Depreciation
methods and useful lives are periodically reviewed and revised as
deemed appropriate.

                            Page 16

Impairment of long-lived assets:  When factors indicate an
impairment is present, management reviews the carrying value of
its rental and leasing equipment to determine if the carrying
value of the assets may not be recoverable due to current and
forecasted economic conditions.  This requires management to make
estimates related to future cash flows from the assets and to
determine whether any deterioration is permanent.  If these
estimates or the related assumptions change in the future,
management may be required to record additional impairment
charges.

Allowance for doubtful accounts:  The Company maintains
allowances for doubtful accounts for estimated losses resulting
from the inability of customers to make rental and lease
payments.  These estimates are primarily based on the amount of
time that has lapsed since payments were due, as well as specific
knowledge related to the ability of customers to make the
required payments.  If the financial condition of the Company's
customers were to deteriorate, additional allowances could be
required that would reduce income.  Conversely, if the financial
condition of the customers were to improve or if legal remedies
to collect past due amounts are more successful than expected,
the allowance for doubtful accounts may need to be reduced and
income would be increased.

Income Taxes: As part of the process of preparing the Company's
consolidated financial statements management is required to
estimate income taxes in each of the jurisdictions in which the
Company operates.  Significant management judgment is required in
determining the provision for income taxes and deferred tax
assets and liabilities.  This process involves management
estimating actual current tax exposure together with assessing
temporary differences resulting from differing treatment of
items, such as depreciation and amortization, for tax and
accounting purposes.  These differences result in deferred tax
assets and liabilities, which are included within the Company's
consolidated balance sheet.  The Company then assesses the
likelihood that its deferred tax assets will be recovered. To the
extent management believes that recovery is not likely, the
Company establishes a valuation allowance.

Results of Operations

Comparison of Three Months Ended November 30, 2004
and November 30, 2003

Revenues

Total revenues for the three months ended November 30, 2004 rose
$3.3 million, or 13.8%, to $27.5 million, compared to $24.2
million in the same period in the prior year.  The increase in
total revenues was due to an increase in rental and lease
revenues of 12.9% while sales of equipment and other revenues
increased 16.9%.

Rental and lease revenues in the second quarter of fiscal 2005
increased to $21.0 million from $18.6 million in the same period
of the prior year, which period included a $1.2 million benefit
from the reversal of certain accounts receivable credits.  This
increase reflects higher demand for test and measurement
equipment in the Company's major market segments, which the
Company believes stem from the general economic recovery.

                            Page 17

Sales of equipment and other revenues were $6.5 million in the
second quarter of fiscal 2005, compared to $5.5 million, which is
a 16.9% increase over the second quarter of fiscal 2004.
Contributing to this increase was the rising demand for T&M
equipment, which was partially offset by a declining pool of DP
equipment available for sale by the Company.  Although
insignificant, another factor in this increase was subscription
fees from the Company's business continuity services business in
the current fiscal year, which had not been acquired in the prior
year.

The Company sells used equipment as a normal part of its rental
business.  However, these sales can fluctuate from quarter to
quarter and year to year depending on equipment availability and
customer requirements and funding.  Gross margin on sales
increased from $2.2 million, or 43.6%, in the second quarter of
fiscal 2004 to $2.5 million, or 47.2%, in the second quarter of
fiscal 2005.  This reflects higher overall sales and a higher
margin, which was due to improvement in equipment market values
and increases in sales of equipment that had been previously
written down or that was older and more fully depreciated.  The
Company expects that its gross margin on sales will return to
more normal levels over the next two years as older and
previously impaired equipment become a smaller part of sales.
However, results for future quarters are subject to future
events, as in the case of unusual opportunities for sales and
early termination of equipment leases.  Such early terminations
can (i) result in sales proceeds to the extent that the customer
decides to purchase the equipment involved, (ii) accelerate lease
payments to the extent of  lease termination fees, and/or (iii)
to the extent the customer does not purchase the equipment,
increase the pool of equipment for lease by the Company, which
would adversely affect future utilization unless the Company can
rent, lease or sell that equipment to another party.

Operating Expenses

Depreciation of rental and lease equipment increased from $7.7
million, or 41.2% of rental and lease revenues, in the second
quarter of fiscal 2004, to $8.5 million, or 40.3% of rental and
lease revenues, in the second quarter of fiscal 2005.  The
increased depreciation expense reflects higher expenditures for
new rental and lease equipment that began in the prior fiscal
year.  The decreased ratio reflects revenues increasing in the
current year at a rate higher than depreciation expense.

Costs of revenues other than depreciation decreased 7.2% from
$3.5 million in the second quarter of fiscal 2004 to $3.2 million
in the second quarter of fiscal 2005.  Costs of revenues other
than depreciation primarily includes the cost of equipment sales,
which decreased from 56.4% of equipment sales in the second
quarter of fiscal 2004 to 52.8% of equipment sales in the second
quarter of fiscal 2005.  The decrease in this percentage is
largely due to the fact that the equipment sold in the second
quarter of fiscal 2005 was more fully depreciated or had been
previously written down.

                            Page 18

Selling, general and administrative expenses decreased $2.6
million, or 26.3%, to $7.2 million in the second quarter of
fiscal 2005 as compared to $9.7 million in the second quarter of
fiscal 2004.  These expenses as a percentage of total revenues
decreased from 40.3% in the second quarter of fiscal 2004 to
26.1% in the second quarter of fiscal 2005.  The decline in SG&A
expenses is largely due to an accrual in the prior year for $2.3
million related to the retirement of the Company's President and
Chief Operating Officer.  Also contributing to the decline were
reductions in personnel, facility and freight costs, as well as
lower bad debt expense.

Interest and Investment Income

Net interest and investment income of $.3 million for the second
quarter of fiscal 2005 was 26.2% lower than $.4 million recorded
in the second quarter of the prior year, mainly as a result of
decreased investments due to the $99.5 million special
distribution paid to common shareholders on January 14, 2004,
partially offset by higher interest rates.

Income Taxes

The Company's effective tax rate was 30.3% in the second quarter
of fiscal 2005, compared to 27.6% for the same period in the
prior year.  The current quarter and the corresponding period
last year include reductions in the accrued liability for income
taxes of $.7 million and $.4 million, respectively, reflecting
the expiration of specific risks related to closed tax audit
years.

Comparison of Six Months Ended November 30, 2004
and November 30, 2003

Revenues

Total revenues for the six months ended November 30, 2004 rose
$6.3 million, or 13.4%, to $53.1 million, compared to $46.9
million in the same period in the prior year.  The increase in
total revenues was due to an increase in rental and lease
revenues of 15.1% while sales of equipment and other revenues
increased 8.0%.

Rental and lease revenues in the first two quarters of fiscal
2005 increased to $40.6 million from $35.3 million in the same
period of the prior year.  This increase reflects higher demand
for test and measurement equipment in the Company's major market
segments, which the Company believes stem from the general
economic recovery.

Sales of equipment and other revenues were $12.5 million in the
first two quarters of fiscal 2005, compared to $11.5 million in
the first two quarters of fiscal 2004.  Contributing to this
increase was the rising demand for T&M equipment, which was
partially offset by a declining pool of DP equipment available
for sale by the Company.  Another factor in this increase was
subscription fees from the Company's business continuity services
business in the current fiscal year, which had not been acquired
in the prior year.

                            Page 19

The Company sells used equipment as a normal part of its rental
business.  However, these sales can fluctuate from quarter to
quarter and year to year depending on equipment availability and
customer requirements and funding.  Gross margin on sales
increased from $4.4 million, or 41.8%, in the first two quarters
of fiscal 2004 to $5.0 million, or 48.3%, in the first two
quarters of fiscal 2005.  This reflects higher overall sales,
while the higher margin was due to improvement in equipment
market values and increases in sales of equipment that had been
previously written down or that was older and more fully
depreciated.  The Company expects that its gross margin on sales
will return to more normal levels over the next two years as
older and previously impaired equipment become a smaller part of
sales.

Operating Expenses

Depreciation of rental and lease equipment increased from $15.7
million, or 44.6% of rental and lease revenues, in the first two
quarters of fiscal 2004, to $16.5 million, or 40.6% of rental and
lease revenues, in the first two quarters of fiscal 2005.  The
increased depreciation expense reflects higher expenditures for
new rental and lease equipment that began in the prior fiscal
year.  The decreased ratio reflects revenues increasing in the
current year at a rate higher than depreciation expense.  The
acquisition cost of rental and lease equipment was $250.2 million
and $248.9 million at November 30, 2004 and 2003, respectively.

Costs of revenues other than depreciation decreased 11.8% from
$7.3 million in the first six months of fiscal 2004 to $6.4
million in the first six months of fiscal 2005.  Costs of
revenues other than depreciation primarily includes the cost of
equipment sales, which decreased from 58.2% of equipment sales in
the first six months of fiscal 2004 to 51.7% of equipment sales
in the first six months of fiscal 2005.  The decrease in this
percentage is largely due to the fact that the equipment sold in
the first two quarters of fiscal 2005 was more fully depreciated
or had been previously written down.

Selling, general and administrative expenses decreased $3.0
million, or 17.1%, to $14.6 million in the first two quarters of
fiscal 2005 as compared to $17.6 million in the first two
quarters of fiscal 2004.  These expenses as a percentage of total
revenues decreased from 37.5% in the first two quarters of fiscal
2004 to 27.4% in the first two quarters of fiscal 2005.  The
decline in SG&A expenses is largely due to an accrual in the
prior year for $2.3 million related to the retirement of the
Company's President and Chief Operating Officer.  Also
contributing to the decline were reductions in personnel,
facility and freight costs, as well as lower bad debt expense.
The Company's total employee count is currently 252, a 5.6%
decline from November 30, 2003.

                            Page 20

Interest and Investment Income

Net interest and investment income of $.6 million for the first
two quarters of fiscal 2005 was 32.5% lower than $.8 million
recorded in the first two quarters of the prior year, mainly as a
result of decreased investments due to the $99.5 million special
distribution paid to common shareholders on January 14, 2004,
partially offset by higher interest rates.

Income from Litigation Settlement

On June 12, 2004, when all contingencies expired, the Company
recognized as other income $1.8 million related to funds received
from a class action lawsuit.  There was no comparable income in
the prior year period.

Income Taxes

The Company's effective tax rate was 34.1% in the first two
quarters of fiscal 2005, compared to 33.0% for the same period in
the prior year.  The current six-month period and the
corresponding period last year include reductions in the accrued
liability for income taxes of $.7 million and $.4 million,
respectively, reflecting the expiration of specific risks related
to closed tax audit years.

Liquidity and Capital Resources

Historically, the Company's primary capital requirements have
been purchases of rental and lease equipment and debt service.
The Company generally purchases equipment throughout each year to
replace equipment that has been sold, and to maintain adequate
levels of rental equipment to meet existing and new customer
demands.  During the last twelve months the Company experienced
an increase in overall rental activity, including increases in
rental rates.  To support some areas of potential growth for both
T&M and DP equipment, and to keep the Company's equipment pool
technologically up-to-date, the Company increased purchases of
equipment in the first six months of fiscal 2005 over the prior
year comparable period.

On January 14, 2004, the Company paid a special cash distribution
of $4 per share, or approximately $99.5 million to its
shareholders of record on December 16, 2003.  Following this
distribution, cash and cash equivalents have declined due to the
higher level of equipment purchases, and further declines could
result if current equipment purchase levels are sustained, the
Company decides to buy back additional shares of its common stock
under the Company's stock repurchase program, pay another special
dividend, pay regular dividends, finance another acquisition, or
pursue other opportunities.  The Company has invested its cash
balance in U.S. government money market funds and marketable
securities with maturities of less than 90 days.

During the first six months of fiscal 2005 and 2004 net cash
provided by operating activities was $24.4 million and $18.0
million, respectively.  The increase in fiscal 2005 is generally
the result of higher net income in the current year as compared
to the prior year.

                            Page 21

During the six months ended November 30, 2004 net cash used in
investing activities was $37.4 million, compared to $18.7 million
in the same period of the prior year.  This increase is mostly
attributable to the purchase of rental and lease equipment
partially offset by decreased payments for the purchase of
marketable securities.

During the first six months of fiscal 2005 and 2004 net cash
flows from financing activities were not significant.

The Company has a $10.0 million revolving line of credit with an
institutional lender, subject to certain restrictions, to meet
equipment acquisition needs as well as working capital and
general corporate requirements.  The Company has had no bank
borrowings since the first quarter of fiscal 2001.

                            Page 22

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

Except for the historical statements and discussions, statements
contained in this Form 10-Q constitute forward-looking statements
within the meaning of section 21E of the Securities Exchange Act
of 1934.  These forward-looking statements reflect the current
views of the Company's management with respect to future events
and financial performance; however, you should not put undue
reliance on these statements.  The Company undertakes no
obligation to update or revise any forward-looking statements
that are or may be affected by developments, which the Company's
management does not deem material.  When used in this Form 10-Q,
the words "anticipate," "believes," "expects," "intends,"
"future," and other similar expressions identify forward-looking
statements.  These forward-looking statements are subject to
certain risks and uncertainties, not all of which are disclosed
in this Form 10-Q.  Although the Company believes its
management's assumptions are reasonable, nonetheless, it is
likely that at least some of these assumptions will not come
true.  Accordingly, the Company's actual results will probably
differ from the outcomes contained in any forward-looking
statement, and those differences could be material.  Factors that
could cause or contribute to these differences include, among
others, those risks and uncertainties discussed under the
sections contained in this Form 10-Q entitled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and in "Quantitative and Qualitative Disclosure
About Market Risk Related to Interest Rates and Currency Rates,"
as well as in the Company's Annual Report on Form 10-K for the
year ended May 31, 2004 including the "Risk Factors" attached as
Exhibit 99 to that document, the Company's Proxy Statement for
its 2004 Annual Meeting of Shareholders and the Company's other
filings with the Securities and Exchange Commission.  Should one
or more of the risks discussed, or any other risks, materialize,
or should one or more of the Company's underlying assumptions
prove incorrect, the Company's actual results may vary materially
from those anticipated, estimated, expected or projected.

                            Page 23

Item 3.  Quantitative and Qualitative Disclosures About Interest
Rates and Currency Rates

The Company is exposed to market risks related to changes in
interest rates and foreign currency exchange rates, however, the
Company does not believes those risks to be material in relation
to its operations. The Company does not have any derivative
financial instruments.

As of November 30, 2004 and May 31, 2004, cash and cash
equivalents included money market securities and the Company had
investments in marketable securities. Due to the short-term
duration of our investment portfolio, an immediate 10% change in
interest rates would not have a material effect on the fair
market value of our portfolio, therefore, the Company would not
expect our operating results or cash flows to be affected to any
significant degree by the effect of a sudden change in market
interest rates on our securities portfolio.

The Company is also subject to risks associated with foreign
currency rate fluctuations to the extent of financing
arrangements for rented and leased equipment denominated in
Canadian dollars or Euros. The Company has determined that
hedging of these assets is not cost effective and instead
attempts to minimize its risks due to currency and exchange rate
fluctuations through working capital management. The Company does
not believe that any foreseeable change in currency rates would
materially or adversely affect its financial position or results
of operations.

Item 4: Controls and Procedures

(a) Evaluation of disclosure controls and procedures

The Company's management, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, evaluated
the effectiveness the Company's disclosure controls and
procedures as of the end of the period covered by this report.
Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and
procedures as of the end of the period covered by this report are
functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports
filed under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods
specified in the SEC's rules and forms.  A controls system, no
matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and
no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company
have been detected.

(b)  Change in Internal Control over Financial Reporting

No change in the Company's internal control over financial
reporting occurred during the Company's most recent fiscal
quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting.

                            Page 24

Part II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 2.  Unregistered Sales of Equity Securities and Use of
Proceeds.

None.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Submission of Matters to a Vote of Security Holders

(a) On October 14, 2004, the 2004 Annual Meeting of Shareholders
of the Registrant was held.  Proxies pursuant to Regulation 14A
were solicited in connection with the meeting.  23,687,636 shares
were present in person or by proxy out of a total of 24,901,373
shares issued and outstanding and eligible to vote on the record
date.

(b) The meeting involved the election of directors.  The
following directors were elected by the number of affirmative
votes set opposite their respective names:

Name                             Number of Votes
----                             ---------------
Gerald D. Barrone                     23,572,269
Nancy Y. Bekavac                      22,658,038
Karen J. Curtin                       23,629,969
Daniel Greenberg                      23,555,820
Joseph J. Kearns                      23,572,469
S. Lee Kling                          23,594,219
James S. Pignatelli                   23,629,969

(c) Other matters submitted to a vote of security holders:  The
shareholders ratified the appointment of Deloitte & Touche LLP as
the registrant's independent public accountants for the current
year.  23,627,835 shares were voted for, 41,480 were voted
against, and 18,321 shares abstained from voting.

Item 6.  Exhibits

(a)

Exhibit #   Description
---------   -----------
3           Articles of Incorporation (Restated) and bylaws are
            incorporated by reference to Exhibits 1.2 and 6.1,
            respectively, of Registration Statement (Form S-14),
            File No. 2-63532.  A copy of the Restated Articles of
            Incorporation and the Certificate of Amendment of
            Restated Articles of Incorporation filed October 24,
            1988 are incorporated by reference to Exhibit (3) to
            the Annual Report (Form 10-K) for the fiscal year
            ended May 31, 1989.  A copy of the Certificate of
            Amendment of Restated Articles of Incorporation filed
            October 15, 1997 is filed as Exhibit (3) to the
            Annual Report (Form 10-K) for the fiscal year ended
            May 31, 1999.  A copy of the amendment to the bylaws
            adopted October 6, 1994 is incorporated by reference
            to the Annual Report (Form 10-K) for the fiscal year
            ended May 31, 1995.  A copy of the amendment to the
            bylaws adopted November 15, 1996 is incorporated by
            reference to Exhibit (3) of the Annual Report (Form
            10-K) for the fiscal year ended May 31, 1997

                            Page 25

31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief
            Executive Officer

31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief
            Financial Officer

32.1        Section 1350 Certification by Principal Executive
            Officer

32.2        Section 1350 Certification by Chief Financial Officer

                            Page 26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.

ELECTRO RENT CORPORATION

DATED:  December 16, 2004

/s/ Craig R. Jones
Craig R. Jones
Vice President and Chief Financial Officer

                            Page 27
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