SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 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 Quarter Ended April 4, 1998.

    [   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934.

                         Commission File Number 1-10573

                            THERMO POWER CORPORATION
             (Exact name of Registrant as specified in its charter)

    Massachusetts                                                  04-2891371
    (State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                        Identification No.)

    81 Wyman Street, P.O. Box 9046
    Waltham, Massachusetts                                         02254-9046
    (Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (781) 622-1000

         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 the number of shares outstanding of each of the
         issuer's classes of Common Stock, as of the latest practicable
         date.

                    Class                    Outstanding at May 1, 1998
         ----------------------------        --------------------------
         Common Stock, $.10 par value                11,822,963
PAGE
<PAGE>
    PART I - FINANCIAL INFORMATION

    Item 1 - Financial Statements
    -----------------------------

                            THERMO POWER CORPORATION

                           Consolidated Balance Sheet
                                   (Unaudited)

                                     Assets

                                                     April 4,  September 27,
    (In thousands)                                       1998           1997
    ------------------------------------------------------------------------
    Current Assets:
      Cash and cash equivalents                      $ 29,797       $ 19,347
      Available-for-sale investments, at quoted
        market value (amortized cost of $4,043
        and $9,129)                                     4,059          9,171
      Accounts receivable, less allowances of 
        $13,703 and $757                               57,451         21,012
      Unbilled contract costs and fees                  7,260          4,856
      Inventories:
        Raw materials                                  32,216         17,570
        Work in process                                 4,384          1,077
        Finished goods                                  6,126          1,237
      Prepaid income taxes                              4,652          3,118
      Other current assets                              2,744            219
                                                     --------       --------
                                                      148,689         77,607
                                                     --------       --------

    Rental Assets, at Cost                             13,813         13,645
      Less: Accumulated depreciation and
            amortization                                3,591          3,369
                                                     --------       --------
                                                       10,222         10,276
                                                     --------       --------

    Property, Plant, and Equipment, at Cost            33,518         19,637
      Less: Accumulated depreciation and
            amortization                                8,961          9,046
                                                     --------       --------
                                                       24,557         10,591
                                                     --------       --------

    Long-term Available-for-sale Investments, at
      Quoted Market Value (amortized cost of
      $2,301 in fiscal 1997; Note 3)                        -          2,200
                                                     --------       --------
    Other Assets                                          238            236
                                                     --------       --------
    Cost in Excess of Net Assets of Acquired
      Companies (Note 3)                              155,295          7,082
                                                     --------       --------
                                                     $339,001       $107,992
                                                     ========       ========

                                        2PAGE
<PAGE>
                            THERMO POWER CORPORATION

                     Consolidated Balance Sheet (continued)
                                   (Unaudited)

                    Liabilities and Shareholders' Investment


                                                     April 4,  September 27,
    (In thousands except share amounts)                  1998           1997
    ------------------------------------------------------------------------
    Current Liabilities:
      Notes payable (Note 3)                         $    822       $      -
      Accounts payable                                 34,985          9,622
      Accrued payroll and employee benefits             8,751          3,133
      Billings in excess of contract costs and fees     5,824          1,353
      Accrued income taxes                              3,343          1,620
      Accrued warranty costs                            4,958          3,435
      Common stock of subsidiary subject to
        redemption ($18,450 redemption value)          18,215              -
      Accrued acquisition expenses (Note 3)            12,489              -
      Other accrued expenses                           19,884          3,240
      Due to parent company and affiliated
        companies                                       3,045            496
                                                     --------       --------
                                                      112,316         22,899
                                                     --------       --------
    Deferred Income Taxes                               1,103            114
                                                     --------       --------
    Long-term Obligations (includes $160,000 due
      to parent company; Note 3)                      160,333            252
                                                     --------       --------
    Common Stock of Subsidiary Subject to
      Redemption ($18,450 redemption value)                 -         18,059
                                                     --------       --------
    Shareholders' Investment:
      Common stock, $.10 par value, 30,000,000
        shares authorized; 12,493,371 shares issued     1,249          1,249
      Capital in excess of par value                   55,392         55,283
      Retained earnings                                13,578         13,811
      Treasury stock at cost, 670,408 and
        578,124 shares                                 (4,650)        (3,636)
      Cumulative translation adjustment                  (330)             -
      Net unrealized gain (loss) on available-
        for-sale investments                               10            (39)
                                                     --------       --------
                                                       65,249         66,668
                                                     --------       --------
                                                     $339,001       $107,992
                                                     ========       ========


    The accompanying notes are an integral part of these consolidated
    financial statements.

                                        3PAGE
<PAGE>



                            THERMO POWER CORPORATION

                      Consolidated Statement of Operations
                                   (Unaudited)


                                                       Three Months Ended
                                                     ----------------------
                                                     April 4,     March 29,
    (In thousands except per share amounts)              1998          1997
    -----------------------------------------------------------------------
    Revenues                                          $68,554       $28,825
                                                      -------       -------

    Costs and Operating Expenses:
      Cost of revenues                                 51,809        23,331
      Selling, general, and administrative expenses    13,410         4,433
      Research and development expenses                 2,659           627
                                                      -------       -------
                                                       67,878        28,391
                                                      -------       -------

    Operating Income                                      676           434

    Interest Income                                       668           472
    Interest Expense (includes $2,314 to related 
      party in fiscal 1998; Note 3)                    (2,636)           (4)
                                                      -------       -------
    Income (Loss) Before Provision (Benefit) for 
      Income Taxes and Minority Interest               (1,292)          902
    Provision (Benefit) for Income Taxes                  (82)          449
    Minority Interest Expense                              78            78
                                                      -------       -------
    Net Income (Loss)                                 $(1,288)      $   375
                                                      =======       =======
    Basic and Diluted Earnings (Loss) per Share
      (Note 2)                                        $  (.11)      $   .03
                                                      =======       =======
    Weighted Average Shares (Note 2):
      Basic                                            11,802        12,467
                                                      =======       =======
      Diluted                                          11,802        12,472
                                                      =======       =======


    The accompanying notes are an integral part of these consolidated
    financial statements.


                                        4PAGE
<PAGE>
                            THERMO POWER CORPORATION

                      Consolidated Statement of Operations
                                   (Unaudited)


                                                        Six Months Ended
                                                     ---------------------
                                                     April 4,    March 29,
    (In thousands except per share amounts)              1998         1997
    ----------------------------------------------------------------------
    Revenues                                         $132,116     $ 57,611
                                                     --------     --------

    Costs and Operating Expenses:
      Cost of revenues                                 97,058       47,864
      Selling, general, and administrative expenses    26,845        8,213
      Research and development expenses                 4,388        1,271
                                                     --------     --------
                                                      128,291       57,348
                                                     --------     --------

    Operating Income                                    3,825          263

    Interest Income (includes $180 from related
      party in fiscal 1998; Note 3)                     1,257          923
    Interest Expense (includes $3,489 to related 
      party in fiscal 1998; Note 3)                    (4,061)          (9)
                                                     --------     --------
    Income Before Provision for Income Taxes and
      Minority Interest                                 1,021        1,177
    Provision for Income Taxes                            987          642
    Minority Interest Expense                             267          156
                                                     --------     --------
    Net Income (Loss)                                $   (233)    $    379
                                                     ========     ========
    Basic and Diluted Earnings (Loss) per Share
      (Note 2)                                       $   (.02)    $    .03
                                                     ========     ========
    Weighted Average Shares (Note 2):
      Basic                                            11,850       12,478
                                                     ========     ========
      Diluted                                          11,850       12,488
                                                     ========     ========


    The accompanying notes are an integral part of these consolidated
    financial statements.


                                        5PAGE
<PAGE>
                            THERMO POWER CORPORATION

                      Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                        Six Months Ended
                                                     ----------------------
                                                     April 4,     March 29,
    (In thousands)                                       1998          1997
    -----------------------------------------------------------------------
    Operating Activities:
      Net income (loss)                             $    (233)    $     379
      Adjustments to reconcile net income (loss)
        to net cash provided by operating 
        activities:
          Depreciation and amortization                 5,213         1,257
          Provision for losses on accounts 
            receivable                                    158             9
          Minority interest expense                       267           156
          Increase in deferred income taxes            (1,814)            -
          Other noncash items                              75            30
          Changes in current accounts, excluding
            the effects of acquisition:
              Accounts receivable                         973        (1,149)
              Inventories                               9,851            75
              Unbilled contract costs and fees          1,191         2,143
              Other current assets                       (468)         (351)
              Accounts payable                         (2,678)          515
              Other current liabilities                (6,030)          976
                                                    ---------     ---------
    Net cash provided by operating activities           6,505         4,040
                                                    ---------     ---------
    Investing Activities:
      Acquisition, net of cash acquired (Note 3)     (148,854)            -
      Sale of acquired business to related party 
        (Note 3)                                       19,117             -
      Proceeds from sale and maturities of 
        available-for-sale investments                  5,011         6,000
      Increase in rental assets                        (1,035)         (570)
      Proceeds from sale of rental assets                 619           944
      Purchases of property, plant, and equipment      (2,956)       (1,508)
      Proceeds from sale of property, plant,
        and equipment                                   1,305             -
      Other                                              (751)            -
                                                    ---------     ---------
    Net cash provided by (used in) investing
      activities                                     (127,544)        4,866
                                                    ---------     ---------
    Financing Activities:
      Issuance of long-term obligation to parent
        company (Note 3)                              160,000             -
      Decrease in short-term notes payable (Note 3)   (27,823)            -
      Repurchases of Company common stock              (1,380)       (2,034)
      Net proceeds from issuance of Company
        common stock                                      475            71
      Repayment of long-term obligations                 (103)          (27)
                                                    ---------     ---------
    Net cash provided by (used in) financing 
      activities                                    $ 131,169     $  (1,990)
                                                    ---------     ---------
                                        6PAGE
<PAGE>
                            THERMO POWER CORPORATION

                Consolidated Statement of Cash Flows (continued)
                                   (Unaudited)


                                                        Six Months Ended
                                                     ----------------------
                                                    April 4,      March 29,
    (In thousands)                                      1998           1997
    -----------------------------------------------------------------------
    Exchange Rate Effect on Cash                   $     320      $       -
                                                   ---------      ---------
    Increase in Cash and Cash Equivalents             10,450          6,916
    Cash and Cash Equivalents at Beginning of 
      Period                                          19,347         29,852
                                                   ---------      ---------
    Cash and Cash Equivalents at End of Period     $  29,797      $  36,768
                                                   =========      =========
    Noncash Activities (Note 3):
      Fair value of assets of acquired company     $ 271,109      $       -
      Cash paid for acquired company                (164,435)             -
      Cash paid in prior year for acquired company    (2,301)             -
                                                   ---------      ---------
        Liabilities assumed of acquired company    $ 104,373      $       -
                                                   =========      =========


    The accompanying notes are an integral part of these consolidated
    financial statements.









                                        7PAGE
<PAGE>
                            THERMO POWER CORPORATION

                   Notes to Consolidated Financial Statements

    1.  General

        The interim consolidated financial statements have been prepared by
    Thermo Power Corporation (the Company) without audit and, in the opinion
    of management, reflect all adjustments of a normal recurring nature
    necessary for a fair statement of the financial position at April 4,
    1998, the results of operations for the three- and six-month periods
    ended April 4, 1998, and March 29, 1997, and the cash flows for the
    six-month periods ended April 4, 1998, and March 29, 1997. The Company's
    results of operations for the six-month periods ended April 4, 1998, and
    March 29, 1997, included 27 weeks and 26 weeks, respectively. Interim
    results are not necessarily indicative of results for a full year.

        The consolidated balance sheet presented as of September 27, 1997,
    has been derived from the consolidated financial statements that have
    been audited by the Company's independent public accountants. The
    consolidated financial statements and notes are presented as permitted by
    Form 10-Q and do not contain certain information included in the annual
    financial statements and notes of the Company. The consolidated financial
    statements and notes included herein should be read in conjunction with
    the financial statements and notes included in the Company's Annual
    Report on Form 10-K for the fiscal year ended September 27, 1997, filed
    with the Securities and Exchange Commission.

    2.  Earnings (Loss) per Share

        During the first quarter of fiscal 1998, the Company adopted
    Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
    Share." As a result, all previously reported earnings per share have been
    restated; however, basic and diluted earnings per share equals the
    Company's previously reported earnings per share for the fiscal 1997
    periods. Basic earnings (loss) per share have been computed by dividing
    net income (loss) by the weighted average number of shares outstanding
    during the period. Diluted earnings per share for the fiscal 1997 periods
    have been computed assuming the exercise of stock options and their
    related income tax effect. The computation of diluted loss per share for
    the fiscal 1998 periods excludes the effect of assuming the exercise of
    stock options because the effect would be antidilutive due to the
    Company's net loss during those periods.


                                        8PAGE
<PAGE>
                            THERMO POWER CORPORATION

    2.  Earnings (Loss) per Share (continued)

        Basic and diluted earnings (loss) per share were calculated as
    follows:

                                 Three Months Ended       Six Months Ended
                                --------------------    --------------------
    (In thousands except       April 4,   March 29,    April 4,    March 29,
    per share amounts)             1998        1997        1998         1997
    ------------------------------------------------------------------------
    Basic
    Net income (loss)           $(1,288)    $   375     $  (233)     $   379
                                -------     -------     -------      -------
    Weighted average shares      11,802      12,467      11,850       12,478
                                -------     -------     -------      -------
    Basic earnings (loss)
      per share                 $  (.11)    $   .03     $  (.02)     $   .03
                                =======     =======     =======      =======
    Diluted
    Net income (loss)           $(1,288)    $   375     $  (233)     $   379
                                -------     -------     -------      -------
    Weighted average shares      11,802      12,467      11,850       12,478
    Effect of stock options           -           5           -           10
                                -------     -------     -------      -------
    Weighted average shares, 
      as adjusted                11,802      12,472      11,850       12,488
                                -------     -------     -------      -------
    Diluted earnings (loss)
      per share                 $  (.11)    $   .03     $  (.02)     $   .03
                                =======     =======     =======      =======

        As of April 4, 1998, the computation of diluted loss per share
    excludes the effect of assuming the exercise of 1,188,749 outstanding
    stock options, with exercise prices ranging from $6.40 to $17.53 per
    share, because the effect would be antidilutive.

    3.  Acquisition

        On November 6, 1997, the Company declared unconditional in all
    respects its cash tender offer for the outstanding ordinary shares of
    Peek plc (Peek). The aggregate cost to acquire all outstanding Peek
    ordinary shares, including related expenses, is estimated at
    approximately $166,736,000. The purchase price includes $2,301,000 that
    was paid for shares acquired in fiscal 1997, classified as "Long-term
    available-for-sale investments" in the accompanying September 27, 1997,
    balance sheet. The Company made final payments for the Peek ordinary
    shares outstanding in the second quarter of fiscal 1998. Peek develops,
    markets, installs, and services equipment to monitor and regulate traffic
    flow in cities and towns around the world. In addition, through its
    Measurement business, sold by the Company effective November 6, 1997,
    Peek developed and marketed field measurement products.

                                        9PAGE
<PAGE>
                            THERMO POWER CORPORATION

    3.  Acquisition (continued)

        To finance the acquisition of Peek, the Company borrowed $160,000,000
    from Thermo Electron Corporation pursuant to a promissory note due
    November 1999, and bearing interest at the 90-day Commercial Paper
    Composite Rate plus 25 basis points, set at the beginning of each
    quarter.

        Subsequent to Peek's acquisition by the Company, the Company sold its
    Measurement business to ONIX Systems Inc., a majority-owned subsidiary of
    Thermo Instrument Systems Inc., effective November 6, 1997, for
    $19,117,000 in cash. Thermo Instrument is a majority-owned subsidiary of
    Thermo Electron. The components of the sales price for the Measurement
    business consisted of the net tangible book value of the Measurement
    business, cost in excess of net assets of acquired company, and the
    estimated tax liability relating to the sale. The cost in excess of net
    assets of acquired company was determined based upon a percentage of the
    Company's total cost in excess of net assets of acquired company
    associated with its acquisition of Peek, based on the 1997 revenues of
    the Measurement business relative to Peek's total 1997 consolidated
    revenues.

        The acquisition has been accounted for using the purchase method of
    accounting and its results have been included in the accompanying
    financial statements from the date of acquisition. The cost of the
    acquisition exceeded the estimated fair value of the acquired net assets
    by $150,710,000, which is being amortized over 40 years. Allocation of
    the purchase price was based on estimates of the fair value of the net
    assets acquired and is subject to adjustment upon finalization of the
    purchase price allocation.

        Based on unaudited data, the following table presents selected
    financial information for the Company and Peek on a pro forma basis,
    assuming the companies had been combined since the beginning of fiscal
    1997. The results of Peek exclude the results of businesses sold by Peek
    prior to its acquisition by the Company and Peek's Measurement business,
    which was sold to ONIX effective November 6, 1997.

                             Three Months Ended          Six Months Ended
                             ------------------      -----------------------
    (In thousands except        March 29,            April 4,      March 29,
    per share amounts)               1997                1998           1997
    ------------------------------------------------------------------------
    Revenues                     $ 60,767            $150,202       $169,346
    Net loss                      (12,982)               (912)        (2,910)
    Basic and diluted loss 
      per share                     (1.04)               (.08)          (.23)

        The pro forma results are not necessarily indicative of future
    operations or the actual results that would have occurred had the
    acquisition of Peek been made at the beginning of fiscal 1997.


                                       10PAGE
<PAGE>
                            THERMO POWER CORPORATION

    3.  Acquisition (continued)

        In connection with the acquisition of Peek, the Company has
    undertaken a restructuring of the acquired business. The restructuring
    activities will primarily include reductions in staffing levels and
    abandonment of excess facilities. In connection with these restructuring
    activities, the Company established reserves totaling $15,101,000,
    primarily for estimated severance, excess facilities, and other exit
    costs associated with the acquisition, $2,822,000 of which was expended
    during the first six months of fiscal 1998. Amounts expended included
    operating losses of $1,682,000 at businesses the Company intends to sell,
    and the remainder primarily represented severance costs. Acquisition
    reserves were recorded as a cost of the acquisition of Peek in accordance
    with Emerging Issues Task Force Pronouncement 95-3 (EITF 95-3). As of
    April 4, 1998, unresolved matters related to the restructuring of Peek
    include completing the identification of specific employees for
    termination and locations to be abandoned or consolidated, as well as
    other decisions concerning the integration of the acquired businesses
    into the Company. In accordance with EITF 95-3, finalization of the
    Company's plan for restructuring Peek will not occur beyond one year from
    the date of acquisition. Any changes to estimates of these costs will be
    recorded as adjustments to cost in excess of net assets of acquired
    companies.

        Notes payable in the accompanying April 4, 1998, balance sheet
    includes $475,000 of outstanding borrowings under a line of credit at
    Peek. Borrowings under the line of credit are payable on demand and are
    denominated in British pounds sterling. As of April 4, 1998, the
    remaining amount available under the line of credit was 4,712,000 British
    pounds sterling. Borrowings under the line of credit bear interest at
    applicable London interbank market rates plus 45 basis points and are
    guaranteed by Thermo Electron. In addition, in connection with the
    acquisition of Peek, the Company assumed promissory notes, which were
    repaid during the first six months of fiscal 1998.

        Peek enters into forward contracts to hedge certain firm purchase and
    sale commitments denominated in currencies other than its subsidiaries'
    local currencies. The purpose of Peek's foreign currency hedging
    activities is to protect Peek's local currency cash flows related to
    these commitments from fluctuations in foreign exchange rates. Because
    Peek's forward contracts are entered into as hedges against existing
    foreign currency exposures, there generally is no effect on the income
    statement since gains or losses on the customer contract offset gains or
    losses on the forward contract.



                                       11PAGE
<PAGE>
                            THERMO POWER CORPORATION

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

        Forward-looking statements, within the meaning of Section 21E of the
    Securities Exchange Act of 1934, are made throughout this Management's
    Discussion and Analysis of Financial Condition and Results of Operations.
    For this purpose, any statements contained herein that are not statements
    of historical fact may be deemed to be forward-looking statements.
    Without limiting the foregoing, the words "believes," "anticipates,"
    "plans," "expects," "seeks," "estimates," and similar expressions are
    intended to identify forward-looking statements. There are a number of
    important factors that could cause the results of the Company to differ
    materially from those indicated by such forward-looking statements,
    including those detailed under the heading "Forward-looking Statements"
    in Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal
    year ended September 27, 1997, filed with the Securities and Exchange
    Commission.

    Overview

        The Company's business is divided into four segments: Traffic
    Control, Industrial Refrigeration Systems, Engines, and Cooling and
    Cogeneration Systems. Through the Company's Peek subsidiary, acquired
    November 1997, the Traffic Control segment develops, markets, installs,
    and services equipment to monitor and regulate traffic flow in cities and
    towns around the world. Peek offers a wide range of products, including
    hardware, such as detectors, counter classifiers, traffic signals and
    controllers, and variable message signs, as well as traffic management
    systems that integrate these products to ease roadway congestion, improve
    safety, and collect data. Traffic management systems include variable
    message systems to advise drivers of accidents and other roadway hazards,
    traffic signal-timing systems that adapt continuously to changing
    conditions to minimize delays, video systems to give real-time analysis
    of traffic flows at intersections and on highways, and automatic
    toll-collection systems. The Company also offers high-resolution video
    equipment to aid police officers in capturing the information necessary
    to charge individuals with motor vehicle violations such as speeding and
    red light violations. The Company's results of operations and financial
    position for fiscal 1998 are expected to be affected significantly by the
    acquisition of Peek.

        Funding patterns of governmental entities, as well as seasonality,
    are expected to result in fluctuations in quarterly revenues and income
    of the Traffic Control segment. As a result of these factors, Peek has
    historically experienced higher sales and net income in the second and
    fourth calendar quarters and lower sales and net income in the first and
    third calendar quarters. Additionally, a portion of the Traffic Control
    segment's revenues result from the sale of large systems, the timing of
    which can lead to variability in the Company's quarterly revenues and
    income. The Company's operations resulted in a net loss for the second
    quarter of fiscal 1998, principally due to interest expense on borrowings
    to fund the acquisition of Peek exceeding the current quarter's operating


                                       12PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Overview (continued)

    income. Government funding patterns and seasonality resulted in a
    decrease in operating income in the second quarter of fiscal 1998, as
    compared to the first quarter of fiscal 1998.

        A significant portion of the Traffic Control segment's revenues
    originate outside the U.S., principally in Europe. Foreign divisions and
    subsidiaries principally sell in their local currencies and generally
    seek to charge their customers in the same currency as their operating
    costs. However, the Company's financial performance and competitive
    position can be affected by currency exchange rate fluctuations affecting
    the relationship between the U.S. dollar and foreign currencies. The
    Company reduces its exposure to currency fluctuations through the use of
    forward contracts. Since the operations of the Traffic Control segment
    are conducted principally in Europe, the Company's operating results
    could be adversely affected by capital spending and economic conditions
    in Europe. In addition, the Traffic Control segment has operations in
    Asia and revenues from exports to Asia. Asia is experiencing a severe
    economic crisis, which has been characterized by sharply reduced economic
    activity and liquidity, highly volatile foreign-currency-exchange and
    interest rates, and unstable stock markets. The Company's sales to Asia
    could be adversely affected by the unstable economic conditions in Asia.

        Through the Company's FES division, the Industrial Refrigeration
    Systems segment supplies standard and custom-designed industrial
    refrigeration systems used primarily by the food-processing, chemical,
    petrochemical, and pharmaceutical industries. NuTemp, Inc. is a supplier
    of both remanufactured and new industrial refrigeration and commercial
    cooling equipment for sale or rental. NuTemp's industrial refrigeration
    equipment is used primarily in the food-processing, chemical,
    petrochemical, and pharmaceutical industries, and its commercial cooling
    equipment is used primarily in institutions and commercial buildings, as
    well as by service contractors. The demand for NuTemp's equipment is
    typically highest in the summer months and can be adversely affected by
    cool summer weather.

        Within the Engines segment, the Company's Crusader Engines division
    manufactures gasoline engines for recreational boats; propane and
    gasoline engines for lift trucks; and natural gas engines for vehicular,
    cooling, pumping, refrigeration, and other industrial applications.

        The Cooling and Cogeneration Systems segment consists of the
    Company's Tecogen division and the Company's ThermoLyte Corporation
    subsidiary. Tecogen designs, develops, markets, and services packaged
    cooling and cogeneration systems fueled principally by natural gas for
    sale to a wide range of commercial, institutional, industrial, and
    multi-unit residential users. Certain large-capacity cooling systems are
    manufactured for Tecogen by FES, and the cogeneration systems are
    manufactured for Tecogen by Crusader. Tecogen also conducts research and
    development of natural gas-engine technology and on applications of
    thermal energy. ThermoLyte is developing and commercializing various
    gas-powered lighting products.

                                       13PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Overview (continued)

        The Company's revenues by industry segment are as follows:

                                  Three Months Ended      Six Months Ended
                                 --------------------   --------------------
                                 April 4,   March 29,   April 4,   March 29,
    (In thousands)                   1998        1997       1998        1997
    ------------------------------------------------------------------------

    Traffic Control              $ 38,983   $      -    $ 77,735   $      -
    Industrial Refrigeration
      Systems                      18,387     15,639      35,396     34,785
    Engines                         6,484      7,916      11,608     13,323
    Cooling and Cogeneration 
      Systems                       4,797      5,948       7,755     10,564
    Intersegment sales 
      elimination                     (97)      (678)       (378)    (1,061)
                                 --------   --------    --------   --------
                                 $ 68,554   $ 28,825    $132,116   $ 57,611
                                 ========   ========    ========   ========

    Results of Operations

    Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
    -------------------------------------------------------------------

        Total revenues increased to $68,554,000 in the second quarter of
    fiscal 1998 from $28,825,000 in the second quarter of fiscal 1997, due to
    the inclusion of $38,983,000 of revenues from Peek, acquired November
    1997. Peek's second quarter revenues are not necessarily indicative of
    future quarterly operating results due to funding patterns of
    governmental entities and seasonality. Industrial Refrigeration Systems
    segment revenues increased to $18,387,000 in fiscal 1998 from $15,639,000
    in fiscal 1997, primarily due to greater demand for custom-designed
    industrial refrigeration packages at FES. Engines segment revenues
    decreased to $6,484,000 in fiscal 1998 from $7,916,000 in fiscal 1997,
    primarily due to decreased sales of marine-engine related products.
    Cooling and Cogeneration Systems segment revenues decreased to $4,797,000
    in fiscal 1998 from $5,948,000 in fiscal 1997, principally due to
    decreased revenues from gas-fueled cooling systems.

        The gross profit margin increased to 24% in the second quarter of
    fiscal 1998 from 19% in the second quarter of fiscal 1997, primarily due
    to a 29% gross profit margin at Peek. The gross profit margin at Peek is
    not necessarily indicative of future quarterly operating results for the
    reasons discussed above. The gross profit margin for the Industrial
    Refrigeration Systems segment was unchanged at 21% in fiscal 1998 and
    1997. The gross profit margin for the Engines segment decreased to 7% in
    fiscal 1998 from 10% in fiscal 1997, primarily due to a decrease in
    revenues. The gross profit margin for the Cooling and Cogeneration
    Systems segment increased to 22% in fiscal 1998 from 20% in fiscal 1997,
    primarily due to a decrease in sales of lower-margin gas-fueled cooling
    systems.

                                       14PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
    -------------------------------------------------------------------
    (continued)

        Selling, general, and administrative expenses as a percentage of
    revenues increased to 20% in the second quarter of fiscal 1998 from 15%
    in the second quarter of fiscal 1997, principally due to relatively
    higher selling, general, and administrative expenses as a percentage of
    revenues at Peek. Research and development expenses increased to
    $2,659,000 in fiscal 1998 from $627,000 in fiscal 1997, due to the
    inclusion of $2,136,000 of research and development expenses at Peek.

        Interest income increased to $668,000 in the second quarter of fiscal
    1998 from $472,000 in the second quarter of fiscal 1997, principally due
    to an increase in average invested balances. Interest expense increased
    by $2,632,000 due to borrowings from Thermo Electron to finance the
    acquisition of Peek (Note 3) and the inclusion of $319,000 of interest
    expense at Peek.

        The effective tax rate decreased to 6% in the second quarter of
    fiscal 1998 from 50% in the second quarter of fiscal 1997. The Company
    recorded a tax benefit in fiscal 1998 at an effective tax rate below the
    statutory federal income tax rate primarily due to the relative impact of
    nondeductible amortization of cost in excess of net assets of acquired
    companies on the Company's pretax loss for the quarter. The effective tax
    rate for fiscal 1997 exceeded the statutory federal income tax rate
    primarily due to an increase in the valuation allowance for net operating
    loss carryforwards and other tax assets of the Company's ThermoLyte
    subsidiary, and the impact of state income taxes. The effective tax rate
    in fiscal 1998 was substantially lower than the effective tax rate in
    fiscal 1997 principally due to the impact of nondeductible amortization
    of cost in excess of net assets of acquired companies relating to the
    Peek acquisition.

        The Company is currently assessing the potential impact of the year
    2000 on the processing of date-sensitive information by the Company's
    computerized information systems and on products sold as well as products
    purchased by the Company. The Company believes that its internal
    information systems and current products, except those of Peek, are
    either year 2000 compliant or will be so prior to the year 2000 without
    incurring material costs. The Company is in the process of assessing the
    impact of the year 2000 problem on the internal information systems and
    current products of Peek. At this time the Company is unable to determine
    the materiality of the year 2000 problem at Peek. There can be no
    assurance that the Company will not experience unexpected costs and
    delays in achieving year 2000 compliance for its internal information
    systems and current products, which could result in a material adverse
    effect on the Company's future results of operations.

        The Company is presently assessing the effect that the year 2000
    problem may have on its previously sold products. The Company is also
    assessing whether its key suppliers are adequately addressing this issue
    and the effect this might have on the Company. The Company has not

                                       15PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
    -------------------------------------------------------------------
    (continued)

    completed its analysis and is unable to conclude at this time that the
    year 2000 problem as it relates to its previously sold products and
    products purchased from key suppliers is not reasonably likely to have a
    material adverse effect on the Company's future results of operations.

    First Six Months Fiscal 1998 Compared With First Six Months Fiscal 1997
    -----------------------------------------------------------------------

        Total revenues increased to $132,116,000 in the first six months of
    fiscal 1998 from $57,611,000 in the first six months of fiscal 1997, due
    to the inclusion of $77,735,000 of revenues from Peek, acquired November
    1997. Industrial Refrigeration Systems segment revenues increased to
    $35,396,000 in fiscal 1998 from $34,785,000 in fiscal 1997, primarily due
    to revenue improvement at FES, resulting principally from greater demand
    for custom-designed industrial refrigeration packages, offset in part by
    lower demand for standard industrial refrigeration packages. Engines
    segment revenues decreased to $11,608,000 in fiscal 1998 from $13,323,000
    in fiscal 1997, primarily due to decreased sales of marine-engine related
    products. Cooling and Cogeneration Systems segment revenues decreased to
    $7,755,000 in fiscal 1998 from $10,564,000 in fiscal 1997, principally
    due to decreased revenues from gas-fueled cooling systems.

        The gross profit margin increased to 27% in the first six months of
    fiscal 1998 from 17% in the first six months of fiscal 1997, primarily
    due to a 32% gross profit margin at Peek. The gross profit margin for the
    Industrial Refrigeration Systems segment increased to 21% in fiscal 1998
    from 19% in fiscal 1997, primarily due to manufacturing efficiencies at
    FES. The gross profit margin for the Engines segment was unchanged at 7%
    in fiscal 1998 and 1997. The gross profit margin for the Cooling and
    Cogeneration Systems segment increased to 21% in fiscal 1998 from 20% in
    fiscal 1997, primarily due to a decrease in sales of lower-margin
    gas-fueled cooling systems.

        Selling, general, and administrative expenses as a percentage of
    revenues increased to 20% in the first six months of fiscal 1998 from 14%
    in the first six months of fiscal 1997, principally due to relatively
    higher selling, general, and administrative expenses as a percentage of
    revenues at Peek. Research and development expenses increased to
    $4,388,000 in fiscal 1998 from $1,271,000 in fiscal 1997, due to the
    inclusion of $3,290,000 of research and development expenses at Peek.
        Interest income increased to $1,257,000 in the first six months of
    fiscal 1998 from $923,000 in the first six months of fiscal 1997,
    principally due to an increase in average invested balances. Interest
    expense increased by $4,052,000 due to borrowings from Thermo Electron to
    finance the acquisition of Peek (Note 3) and the inclusion of $564,000 of
    interest expense at Peek.

        The effective tax rate increased to 97% in the first six months of
    fiscal 1998 from 55% in the first six months of fiscal 1997. The
    effective tax rate for fiscal 1998 exceeded the statutory federal income
    tax rate primarily due to the relative impact of nondeductible
    amortization of cost in excess of net assets of acquired companies on the

                                       16PAGE
<PAGE>
                            THERMO POWER CORPORATION

    First Six Months Fiscal 1998 Compared With First Six Months Fiscal 1997
    -----------------------------------------------------------------------
    (continued)

    Company's pretax income for the first six months of fiscal 1998. The
    effective tax rate for fiscal 1997 exceeded the statutory federal income
    tax rate primarily due to an increase in the valuation allowance for net
    operating loss carryforwards and other tax assets of the Company's
    ThermoLyte subsidiary, and the impact of state income taxes. The
    effective tax rate increased from fiscal 1997 to fiscal 1998 principally
    due to the impact of nondeductible amortization of cost in excess of net
    assets of acquired companies relating to the Peek acquisition.

        Minority interest expense increased to $267,000 in the first six
    months of fiscal 1998 from $156,000 in the first six months of fiscal
    1997 due to minority interest expense on Peek's earnings relating to Peek
    shares tendered after November 6, 1997, through January 16, 1998. As of
    January 16, 1998, the Company had acquired all of the Peek outstanding
    ordinary shares.

    Liquidity and Capital Resources

        Consolidated working capital was $36,373,000 at April 4, 1998,
    compared with $54,708,000 at September 27, 1997. Included in working
    capital are cash, cash equivalents, and available-for-sale investments of
    $33,856,000 at April 4, 1998, compared with $28,518,000 at September 27,
    1997. Of the $33,856,000 balance at April 4, 1998, $14,644,000 was held
    by ThermoLyte, and the remainder was held by the Company and its wholly
    owned subsidiaries. At April 4, 1998, $14,822,000 of the Company's cash
    and cash equivalents was held by its foreign subsidiaries. While this
    cash can be used outside of the United States, repatriation of this cash
    into the United States would be subject to a United States tax.
    Additionally, working capital at April 4, 1998, was reduced by common
    stock of subsidiary subject to redemption of $18,215,000, which
    represents ThermoLyte's common stock, redeemable in December 1998 or
    1999, the redemption value of which is $18,450,000.

        During the first six months of fiscal 1998, $6,505,000 of cash was
    provided by operating activities. Cash provided by the Company's
    operating results was improved by a reduction in inventories of
    $9,851,000, offset in part by a reduction in other current liabilities of
    $6,030,000. The decrease in inventories resulted primarily at Peek,
    principally due to the timing of shipments. The decrease in other current
    liabilities also resulted primarily at Peek, principally from a reduction
    in accrued acquisition expenses (Note 3) and tax and dividend payments
    made during the first six months of fiscal 1998.

        During the first six months of fiscal 1998, the Company's primary
    investing activities, excluding available-for-sale investments activity,
    included the acquisition of Peek for $148,854,000 in cash, net of cash
    acquired, and the sale of Peek's Measurement business for $19,117,000 in
    cash (Note 3). In addition, the Company expended $3,991,000 for purchases
    of rental assets and property, plant, and equipment, and received

                                       17PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Liquidity and Capital Resources (continued)

    $1,924,000 in proceeds from the sale of rental assets and property,
    plant, and equipment. During the remainder of fiscal 1998, the Company
    expects to make capital expenditures for the purchase of rental assets
    and property, plant, and equipment of approximately $11,500,000,
    including approximately $500,000 for software and hardware that is year
    2000 compliant.

        In April 1998, ThermoLyte signed a non-binding letter of intent to
    acquire the outstanding stock of Optronics, Inc. and Optronics
    International, Inc. for approximately $5.1 million in cash and the
    assumption of certain liabilities. The proposed acquisition is subject to
    certain conditions, including completion of due diligence and negotiation
    of a definitive agreement, as well as approval by the Company's and
    ThermoLyte's boards of directors and the stockholders of the potential
    acquiree. The final terms of such acquisition have not been determined,
    and there can be no assurance that the acquisition will be completed.

        The Company's financing activities provided $131,169,000 of cash in
    the first six months of fiscal 1998. The Company borrowed $160,000,000
    from Thermo Electron to finance the acquisition of Peek (Note 3), repaid
    $27,823,000 of short-term borrowings, and expended $1,380,000 of cash for
    the purchase of Company common stock. 

        The Company's $160,000,000 promissory note to Thermo Electron is due
    in November 1999. Thermo Electron has indicated its intention to require
    that the Company's indebtedness to Thermo Electron be repaid only to the
    extent the Company's liquidity and cash flow permit. The Company believes
    its existing resources are sufficient to meet the capital requirements of
    its existing operations for the foreseeable future, except for repayment
    of the promissory note to Thermo Electron as discussed above.


    PART II - OTHER INFORMATION

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

       On March 13, 1998, at the Annual Meeting of Shareholders, the
    shareholders elected six incumbent directors to a one-year term expiring
    in 1999. The directors reelected at the meeting were: Marshall J.
    Armstrong, J. Timothy Corcoran, Peter O. Crisp, John N. Hatsopoulos,  
    Donald E. Noble, and Arvin H. Smith. Mr. Armstrong received 11,680,616
    shares voted in favor of his election and 10,126 shares voted against.
    Messrs. Corcoran, Hatsopoulos, and Smith each received 11,681,942 shares
    voted in favor of his election and 8,800 shares voted against. Mr. Crisp
    received 11,681,892 shares voted in favor of his election and 8,850
    shares voted against. Mr. Noble received 11,681,392 shares voted in favor
    of his election and 9,350 shares voted against. No abstentions or broker
    nonvotes were recorded on the election of directors.

    Item 6 - Exhibits
    -----------------

        See Exhibit Index on the page immediately preceding the exhibits.

                                       18PAGE
<PAGE>
                            THERMO POWER CORPORATION

                                   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 thereunto duly authorized as of the 11th day of May 1998.

                                              THERMO POWER CORPORATION



                                              Paul F. Kelleher
                                              ---------------------------
                                              Paul F. Kelleher
                                              Chief Accounting Officer



                                              John N. Hatsopoulos
                                              ---------------------------
                                              John N. Hatsopoulos
                                              Chief Financial Officer and
                                                Senior Vice President
                                                






                                       19PAGE
<PAGE>
                            THERMO POWER CORPORATION

                                  EXHIBIT INDEX


    Exhibit
    Number        Description of Exhibit
    ------------------------------------------------------------------------

     27           Financial Data Schedule.