SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended  April 2, 2000
                                -------------

                                       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    0-19703
                      ------------------

                               Farrel Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Delaware                                               22-2689245
--------------------------                              ------------------------

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

                   25 Main Street, Ansonia, Connecticut,   06401
               ---------------------------------------------------
               (Address of principal executive offices)  (Zip Code)

                                 (203) 736-5500
                                 --------------
              (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
   ----    ----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
                      -------------------------------------

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 9, 2000
--------------------------------------------------------------------------------

Common Stock (Voting), $.01 par value                     5,250,061
                                                     ------------------


<PAGE>


                               Farrel Corporation
                               ------------------

                                      Index
                                      -----

                                                                            Page

Part I.   Financial Information
          ---------------------

          Consolidated Balance Sheets -
          April 2, 2000 and December 31, 1999                                  3

          Consolidated Statements of Operations -
          Three Months Ended April 2, 2000
            and April 4, 1999                                                  4

          Consolidated Statements of Cash Flows -
          Three Months ended April 2, 2000
            and April 4, 1999                                                  5

          Notes to Consolidated Financial Statements                       6 - 7

          Management's Discussion and Analysis of Financial
          Condition and Results of Operations                             8 - 11

          Exhibit 11 - Computation of Earnings Per Share                      12

Part II.  Other Information                                                   13
          -----------------



                                  Page 2 of 14
<PAGE>


                         Part I - Financial Information

                               FARREL CORPORATION
                               ------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                        (In thousands, except share data)

                                                         April 2,   December 31,
                                                         --------   ------------
                                                           2000         1999
                                                         --------     --------
ASSETS                                                 (Unaudited)
Current Assets:
   Cash and cash equivalents .......................     $  7,496     $  6,069
   Accounts receivable, net of allowance for
      doubtful accounts of $179 and $185,
      respectively .................................        8,479       15,027
   Inventory .......................................       15,661       11,975
   Other current assets ............................        1,338        1,374
                                                         --------     --------
                 Total current assets ..............       32,974       34,445
   Property, plant and equipment - net
      of accumulated depreciation of $13,465 and
      $13,186, respectively ........................       10,435       10,995
   Prepaid pension costs ...........................        3,280        2,881
   Other assets ....................................          494          541
                                                         --------     --------
      Total assets .................................     $ 47,183     $ 48,862
                                                         ========     ========
LIABILITIES & STOCKHOLDERS' EQUITY
   Current Liabilities:
      Accounts payable .............................     $  6,907     $  7,837
      Accrued expenses & taxes .....................          928        2,157
      Advances from customers ......................        6,451        4,015
      Accrued installation & warranty costs ........        1,545        1,629
      Short - term debt ............................        1,273        1,292
                                                         --------     --------
      Total current liabilities ....................       17,104       16,930
   Long - term debt ................................        2,546        2,584
   Postretirement benefit obligation ...............        1,135        1,138
   Long term pension obligation ....................        1,026        1,030
   Deferred income taxes ...........................        1,369        1,316
   Commitments and contingencies ...................         --           --
                                                         --------     --------
      Total liabilities ............................       23,180       22,998
                                                         --------     --------
   Stockholders' equity:
      Preferred stock, par value $100, 1,000,000 ...         --           --
           shares authorized, no shares issued
      Common stock, par value $.01,
           10,000,000 shares authorized,
            6,142,106 shares issued ................           61           61
      Paid in capital ..............................       19,295       19,295
      Treasury stock, 892,045 shares at
           April 2, 2000 and December 31, 1999 .....       (2,513)      (2,513)
      Retained earnings ............................        8,253        9,943
      Accumulated other comprehensive expense ......       (1,093)        (922)
                                                         --------     --------
           Total stockholders' equity ..............       24,003       25,864
                                                         --------     --------
Total liabilities and stockholders' equity .........     $ 47,183     $ 48,862
                                                         ========     ========

           See Accompanying Notes to Consolidated Financial Statements



                                  Page 3 of 14
<PAGE>


                               FARREL CORPORATION
                               ------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                      (In thousands, except per share data)


                                                  Three Months Ended
                                                  ------------------
                                             April 2,           April 4,
                                               2000               1999
                                           -----------        -----------
                                           (unaudited)        (unaudited)

Net Sales ..........................       $    11,437        $    13,294

Cost of sales ......................             9,360             10,890
                                           -----------        -----------

Gross margin .......................             2,077              2,404

Operating expenses:

    Selling ........................             1,587              1,710

    General & administrative .......             2,122              2,222

    Research & development .........               437                383
                                           -----------        -----------

Total operating expenses ...........             4,146              4,315
                                           -----------        -----------

Operating loss .....................            (2,069)            (1,911)

Interest income ....................                85                235

Interest expense ...................               (72)              (176)

Gain from sale of real estate ......              --                1,879

Other expense, net .................              (110)              (103)
                                           -----------        -----------

Loss before income taxes ...........            (2,166)               (76)

Benefit (provision) for income taxes               686                (41)
                                           -----------        -----------

Net  loss ..........................       ($    1,480)       ($      117)
                                           ===========        ===========

Per share data:

Basic and Diluted net loss
    per common share ...............       ($     0.28)       ($     0.02)
                                           ===========        ===========
Average shares outstanding:
   Basic ...........................         5,250,061          5,812,676
                                           ===========        ===========
   Diluted .........................         5,250,061          5,812,676
                                           ===========        ===========
Dividends declared .................       $      0.04        $      0.16
                                           ===========        ===========


           See Accompanying Notes to Consolidated Financial Statements


                                  Page 4 of 14
<PAGE>


<TABLE>
                               FARREL CORPORATION
                               ------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                 (In thousands)

<CAPTION>
                                                                 Three Months Ended
                                                                 ------------------
                                                               April 2,       April 4,
                                                               -------        -------
                                                                 2000          1999
                                                               -------        -------
                                                             (Unaudited)    (Unaudited)
<S>                                                            <C>            <C>
Cash flows from operating activities:

  Net Income/(loss) ....................................       ($1,480)       ($  117)

  Adjustments to reconcile net (loss)/income to net
  cash provided by/(used in) operating activities:
    Gain on disposal of fixed assets ...................             0         (1,884)
    Depreciation and amortization ......................           521            519
    Decrease in accounts receivable ....................         6,477          8,016
    Increase in inventory ..............................        (3,642)        (2,743)
    Increase in prepaid pension costs ..................          (400)          --
    Decrease in accounts payable .......................          (876)        (5,072)
    Increase in customer advances ......................         2,451          1,367
    Decrease in accrued expenses & taxes ...............        (1,207)          (415)
    Decrease in accrued installation and warranty costs            (74)           (77)
    Increase/(decrease) in deferred income taxes .......            44             (5)
    Other ..............................................             7           (520)
                                                               -------        -------
    Total adjustments ..................................         3,301           (814)
                                                               -------        -------
    Net cash provided by/(used in) operating activities          1,821           (931)
                                                               -------        -------
Cash flows from investing activities:

    Proceeds from disposal of fixed assets .............          --            2,449
    Purchases of property, plant and equipment .........          (135)          (513)
                                                               -------        -------
    Net cash (used in)/provided by investing activities           (135)         1,936
Cash flows from financing activities:
    Proceeds from short-term borrowing, net ............          --              874
    Dividends paid .....................................          (210)          (951)
    Purchase of treasury stock .........................          --           (1,272)
                                                               -------        -------
    Net cash used by financing activities ..............          (210)        (1,349)
Effect of foreign currency exchange rate changes on cash           (49)           (30)
                                                               -------        -------
Net increase (decrease) in cash and cash equivalents ...         1,427           (374)
    Cash and cash equivalents - Beginning of period ....         6,069          5,786
                                                               -------        -------
    Cash and cash equivalents - End of period ..........       $ 7,496        $ 5,412
                                                               =======        =======

Income taxes paid ......................................       $    78        $ 1,057
                                                               =======        =======
Interest paid ..........................................       $     1        $     6
                                                               =======        =======
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements



                                  Page 5 of 14
<PAGE>



                               FARREL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

          In the opinion of management,  the accompanying unaudited consolidated
financial  statements  contain  all  adjustments,   consisting  only  of  normal
recurring adjustments, necessary to present fairly, in accordance with generally
accepted accounting  principles,  the consolidated  financial position of Farrel
Corporation   ("Farrel"  or  "the  Company")  as  of  April  2,  2000,  and  the
consolidated results of its operations and cash flows for the three months ended
April 2, 2000 and April 4, 1999. These results are not necessarily indicative of
results to be expected for the full fiscal year. These statements should be read
in conjunction  with the financial  statements and notes thereto included in the
Company's Annual Report and Form 10-K for the year ended December 31, 1999.

NOTE 2 - INVENTORY

         Inventory is comprised of the following:

                                              April 2,     December 31,
                                              --------     ------------
                                                2000          1999
                                              -------       -------
                                                  (In thousands)
         Stock and raw materials.......       $ 7,403       $ 7,934
         Work-in process ..............         8,258         4,041
                                              -------       -------
         Total ........................       $15,661       $11,975
                                              =======       =======

NOTE 3 -  COMPREHENSIVE INCOME (LOSS)

          The  components of  comprehensive  loss, for the  three-month  periods
ended are as follows:

                                                         April 2,       April 4,
                                                           2000           1999
                                                           ----           ----
                                                              (In thousands)
          Net loss ...............................       $(1,480)       $  (117)
          Foreign currency translation adjustments          (171)          (319)
                                                         -------        -------
          Comprehensive loss .....................       $(1,651)       $  (436)
                                                         =======        =======

          The  components of accumulated  other  comprehensive  expense,  net of
related tax, are as follows:

                                                       April 2,     December 31,
                                                         2000          1999
                                                         ----          ----
                                                           (In thousands)
          Minimum pension liability ..............     $  (613)      $  (613)
          Foreign currency translation adjustments        (480)         (309)
                                                       -------       -------
          Accumulated other comprehensive expense      $(1,093)      $  (922)
                                                       =======       =======


NOTE 4 -  SEGMENT INFORMATION

          The Company's  operations are considered  one operating  segment.  The
Company's products consist of new machines,  spares and repair related services.
The Company's products and services are sold to commercial  manufacturers in the
plastic and rubber industries.  The manufacturing,  assembly and distribution of
the Company's products are essentially the same.

NOTE 5 -  GAIN FROM SALE OF REAL ESTATE

          During  January  1999,  the Company  completed the sale of excess real
estate  held for sale for $2.4  million.  The  Company  recorded  a gain of $1.9
million from the sale.


                                  Page 6 of 14
<PAGE>


NOTE 6 -  IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

          In June 1998,  the FASB  issued  Statement  No.  133,  Accounting  for
Derivative  Instruments and Hedging Activities,  which must be adopted effective
January  1,  2001.  The  Statement  provides  a new  method  of  accounting  for
derivatives  and hedges.  The Company does not  anticipate  that the adoption of
this  Statement  will have a significant  effect on its results of operations or
financial position.

          In December  1999,  the  Securities  and Exchange  Commission  ("SEC")
issued Staff  Accounting  Bulletin  No. 101,  Revenue  Recognition  in Financial
Statements  ("SAB  101").  SAB 101  contains  the SEC staff's  views in applying
generally  accepted  accounting  principles  related to revenue  recognition  in
financial  statements.  SAB 101 includes  requirements for when shipments may be
recorded  as  revenue  when the terms of the sale  include  customer  acceptance
provisions or an obligation of the seller to install the product. The provisions
of this  bulletin are  effective in the second  quarter of 2000.  The Company is
reviewing the requirements of SAB 101 which could create a timing  difference in
when the Company  recognizes  revenue and has not yet determined the full impact
of SAB 101 on its consolidated financial statements.  The impact, however, could
be material, on both a quarterly and annual basis, on the Company's statement of
operations  should the Company  determine it needs to change its  accounting for
revenue  recognition.  Such a change could result in significant portions of its
revenue  being  recognized  in accounting  periods  significantly  later than it
historically would have been recognized.


                                  Page 7 of 14
<PAGE>


PART I - ITEM 2 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION & RESULTS OF OPERATIONS

Safe Harbor Statements under Private Securities Litigation Reform Act of 1995
-----------------------------------------------------------------------------

          Certain  statements  contained  in  the  Company's  public  documents,
including this report and in particular,  in this  "Management's  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations"  may be forward
looking  and may be  subject to a variety  of risks and  uncertainties.  Various
factors could cause actual results to differ  materially from these  statements.
These factors include, but are not limited to pricing pressures from competitors
and/or customers; continued economic and political uncertainty in certain of the
Company's  markets;  the Company's ability to maintain and increase gross margin
levels;  the Company's  ability to generate  positive cash;  changes in business
conditions,  in general, and, in particular,  in the businesses of the Company's
customers and  competitors  and other factors which might be described from time
to time in the Company's filings with the Securities and Exchange Commission.

Results of Operations
---------------------

Three  Months  Ended April 2, 2000  Compared To The Three  Months Ended April 4,
--------------------------------------------------------------------------------
1999
----

          Net sales for the three month period  ended April 2, 2000,  were $11.4
million  compared to $13.3  million for the three  month  period  ended April 4,
1999,  a decrease  of $1.9  million.  The  decrease  in net sales is a result of
continued  weak  market  conditions  faced by the  Company.  The  timing  of the
Company's sales, particularly new machines sales, is highly dependent on when an
order is received, the amount of lead-time from receipt of order to delivery and
specific  customer  requirements.  The  Company  operates  in markets  which are
extremely  competitive with cyclical  demand.  Many of our customers and markets
operate at less than full  capacity  and the  European  and Far East markets are
particularly competitive and are subject to local economic events.

          Orders  received for the three month period ended April 2, 2000,  were
$11.0  million  compared to $17.2 million for the three month period ended April
4, 1999.  The  decline in incoming  orders is due to the weak market  conditions
faced by the Company.

          The Company's  products are primarily  supplied to  manufacturers  and
represent capital commitments for new plants, expansion or modernization. In the
case of major  equipment  orders,  up to 12 months are  required to complete the
manufacturing  process.  Accordingly,  revenues  reported  in the  statement  of
operations  may  represent  orders  received in the current or previous  periods
during which  economic  conditions  in various  geographic  markets of the world
impact our level of order intake.  Many of the Company's  traditional  customers
and markets are operating with excess  capacity  thereby  reducing the number of
projects for plant  expansion  and  modernization.  The Company is  experiencing
increased  pricing  pressures  from  competitors in an overall  smaller  market.
Further,  the cyclical nature of industry demand and,  therefore,  the timing of
order  intake may effect the  Company's  quarterly  results of  operations.  The
Company's   ability  to  maintain  and   increase  net  sales   depends  upon  a
strengthening and stability in the Company's traditional markets and our ability
to control costs to effectively compete in the current markets.  There can be no
assurance that the current level of orders will continue, that market conditions
will not worsen, or that improvements in the Company's  traditional markets will
lead to increased orders for the Company's products.

          The level of backlog  considered  firm by management at April 2, 2000,
was $28.3  million  compared to $28.9  million at December 31,  1999,  and $37.0
million at April 4, 1999. Firm backlog as of May 9, 2000, was $36.0 million.

          Gross margin for the three month period ended April 2, 2000,  was $2.1
million compared to $2.4 million for the three month period ended April 4, 1999.
The margin  percentage  of 18.2% for the three month period ended April 2, 2000,
was  approximately  the same as the three month period ended April 4, 1999.  The
gross margin for the three month period ended April 2, 2000, reflects benefit of
reduced


                                  Page 8 of 14
<PAGE>


manufacturing overheads as a result of the consolidation, completed in mid 1999,
of the Company's U.K.  operations from two facilities to one. These savings were
offset by lower margins received on sales due to weak market conditions.

          Operating  expenses  for the three month  period  ended April 2, 2000,
were $4.1  million  compared to $4.3  million for the three month  period  ended
April 4, 1999, a decrease of $0.2 million. The decrease is due to lower employee
compensation and benefit costs.

          Interest  expense for the three month period ended April 2, 2000,  was
$72,000  compared to $176,000  for the three month period ended April 4, 1999, a
decrease of $104,000. The decrease is due to lower average borrowings.

          The Company provides for income taxes at the statutory rates in effect
in each tax  jurisdiction  in which  income is earned or losses  are  generated,
adjusted for permanent differences in determining income for financial reporting
and income tax  purposes.  The income tax rate for the three month  period ended
April 2, 2000,  was 31.7%.  For the three month period ended April 4, 1999,  the
Company  recorded a  consolidated  tax provision as a result of earning  taxable
income in the United States,  at a higher tax rate, and incurring  losses in the
United  Kingdom at a lower tax rate. The effective tax rate varies among periods
due to the change in the amount of income and losses  generated in different tax
jurisdictions.

Material Contingencies
----------------------

          In  February  1995,  the  Company  and Black & Decker  entered  into a
Settlement  Agreement  pursuant  to which  Black & Decker  agreed to assume full
responsibility  for the  investigation  and  remediation of any pre-May 12, 1986
environmental  contamination  at the  Company's  Ansonia and Derby,  Connecticut
facilities,   as  required  by  the  Connecticut   Department  of  Environmental
Protection ("DEP").  As part of the settlement,  the Company transferred by quit
claim deed a vacant surfaced parking lot to the City of Ansonia.  As required by
the  Settlement  Agreement,  environmental  assessments of the Ansonia and Derby
properties are being conducted by Black & Decker.

          On January 19, 1999,  the Company sold all of its Derby,  Connecticut,
real estate and facilities.  By the terms of that sale, the purchaser  committed
to cooperate  with Black & Decker in any additional  investigation  of the Derby
property and any remediation of that property that might be required by the DEP.
In  addition,  the  Company  has been named as an  additional  insured on a $5.0
million  environmental  policy  obtained by the  purchaser  and the purchaser is
obligated  to name the  Company  as an  additional  insured on any and all other
environmental  insurance policies obtained by the purchaser related to the Derby
property.

          On the basis of the preliminary  data now available there is no reason
to believe that any remediation  activities  which might be required as a result
of the findings of the assessment  will have a material  effect upon the capital
expenditures,  results of  operations,  financial  position  or the  competitive
position of the Company.  This forward  looking  statement  could,  however,  be
influenced  by any  findings  of  environmental  contamination  attributable  to
post-May 12, 1986 activities.

Liquidity and Capital Resources; Capital Expenditures
-----------------------------------------------------

          Working  capital and the working  capital ratio at April 2, 2000, were
$15.9 million and 1.9 to 1, respectively, compared to $17.5 million and 2.0 to 1
at  December  31,  1999,  respectively.  During the first  quarter of 2000,  the
Company  paid a dividend of $0.04 per share.  The  Company  has also  declared a
dividend of $0.04 per share of common stock to be paid in the second  quarter of
2000. The Company's  ability to pay dividends in the future is generally limited
under its credit facility  described below to the aggregate of 25% of net income
during the most recently  completed  four fiscal  quarters  after  deducting (a)
distributions  previously  made and (b)  purchases  by the Company of its common
stock  during the same  period,  without  the  consent  of and/or  waiver by the
Company's  bank. The Company has received a waiver from its bank with respect to
the dividend declared in the second quarter of 2000.



                                  Page 9 of 14
<PAGE>



          Due to the nature of the Company's business, many sales are of a large
dollar  amount.  Consequently,  the timing of recording such sales may cause the
balances in accounts  receivable  and/or  inventory  to  fluctuate  dramatically
between quarters and may result in significant  fluctuations in cash provided by
operations.  Historically,  the Company has not experienced significant problems
regarding the collection of accounts receivable.  The Company has also generally
financed  its  operations  with cash  generated  by  operations,  with  progress
payments from customers and with  borrowings  under its bank credit  facilities.
Management  anticipates  that  its  cash  balances,  operating  cash  flows  and
available credit line will be adequate to fund anticipated  capital  commitments
and  working  capital  requirements  for at least the next  twelve  months.  The
Company made capital  expenditures  of $0.1 million and $0.5 million  during the
first quarters of fiscal 2000 and 1999, respectively.

          The Company  has a worldwide  multi-currency  credit  facility  with a
major U.S. bank.  Interest varies based upon  prevailing  market  interest.  The
facility  contains  combined  limits on direct  borrowings and letters of credit
based upon stipulated percentages of accounts receivable, inventory and backlog.
The facility also contains  covenants  specifying  minimum and maximum operating
thresholds for operating results and selected  financial  ratios.  The agreement
contains certain restrictions on the making of investments, on borrowings and on
the sale of assets.  At April 2, 2000,  the maximum  revolver  borrowing  and/or
letter of credit  issuance  available  under the  facility  to the  Company  and
subsidiaries based upon the borrowing base formula was $13.7 million. There were
$2.9 million and $3.8 million of letters of credit  outstanding at April 2, 2000
and  December 31,  1999,  respectively.  At April 2, 2000 and December 31, 1999,
there were $3.8 million and $3.9 million,  respectively,  outstanding  under the
term loan portion of the facility.

          In fiscal 2000, new legal minimum funding  guidelines for U.K. pension
plans became effective in the U.K. These guidelines are significantly  different
than prior  guidelines.  As a result,  the Company  expects it will need to make
approximately $950,000 of contributions to its U.K. pension plan in Fiscal 2000.
Approximately  $300,000 of contributions were made in the quarter ended April 2,
2000, with the remaining  amount to be made in monthly  payments  throughout the
remainder of the year. In recent years prior to fiscal 2000, the Company was not
required to and did not make contributions to its U.K. pension plans.

Year 2000
---------

          The  Company  undertook a year 2000  readiness  project to address the
impact and risks  related to the  ability of the  Company's  computer  hardware,
computer programs, equipment with embedded computer chips and critical suppliers
to operate and  function  properly  during the  transition  to the year 2000 and
thereafter.

          The Company has not experienced any significant  operational  problems
related to the year 2000. The total amount  expended,  relating to the Company's
internal  information  systems was approximately  $1.0 million.  Other expenses,
primarily  manufacturing and office equipment  replacement and employee costs of
the year 2000 readiness  project were not material.  During the first quarter of
2000, the Company applied  software changes for year 2000 issues which occurred.
The Company continues to monitor its operations for year 2000 issues.

Impact of Recently Issued Accounting Standards
----------------------------------------------

          In June 1998,  the FASB  issued  Statement  No.  133,  Accounting  for
Derivative  Instruments and Hedging Activities,  which must be adopted effective
January  1,  2001.  The  Statement  provides  a new  method  of  accounting  for
derivatives  and hedges.  The Company does not  anticipate  that the adoption of
this  Statement  will have a significant  effect on its results of operations or
financial position.



                                 Page 10 of 14
<PAGE>


          In December  1999,  the  Securities  and Exchange  Commission  ("SEC")
issued Staff  Accounting  Bulletin  No. 101,  Revenue  Recognition  in Financial
Statements  ("SAB  101").  SAB 101  contains  the SEC staff's  views in applying
generally  accepted  accounting  principles  related to revenue  recognition  in
financial  statements.  SAB 101 includes  requirements for when shipments may be
recorded  as  revenue  when the terms of the sale  include  customer  acceptance
provisions or an obligation of the seller to install the product. The provisions
of this  bulletin are  effective in the second  quarter of 2000.  The Company is
reviewing the requirements of SAB 101 which could create a timing  difference in
when the Company  recognizes  revenue and has not yet determined the full impact
of SAB 101 on its consolidated financial statements.  The impact, however, could
be material, on both a quarterly and annual basis, on the Company's statement of
operations  should the Company  determine it needs to change its  accounting for
revenue  recognition.  Such a change could result in significant portions of its
revenue  being  recognized  in accounting  periods  significantly  later than it
historically would have been recognized.

ITEM 2 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          The Company is exposed to market risk from changes in foreign currency
and interest rates. The Company manufactures many of its products and components
in the  United  Kingdom  and  purchases  many  components  in  foreign  markets.
Approximately  50% of the Company's  revenue is generated from foreign  markets.
The Company  manages its risk to foreign  currency  rate changes by  maintaining
foreign  currency bank  accounts in  currencies in which it regularly  transacts
business and the use of foreign exchange forward contracts. The Company does not
enter into derivative contracts for trading or speculative purposes.  The amount
of  foreign  exchange  forward  contracts  are not  considered  material  to the
Company's financial position or its operations.

          The Company's  cash  equivalents  and short-term  investments  and its
outstanding debt bear variable  interest rates. The rates are adjusted to market
conditions.  Changes in the market rate effects  interest earned and paid by the
Company. The Company does not use derivative  instruments to offset the exposure
to changes in interest  rates.  Changes in the interest  rates  related to these
items are not  expected to have a material  impact on the  Company's  results of
operations.



                                 Page 11 of 14
<PAGE>

                                                                      Exhibit 11


<TABLE>
                               FARREL CORPORATION
                 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
                      (In thousands, except per share data)
                      -------------------------------------

<CAPTION>
                                                           Three Months Ended
                                                           ------------------
                                                       April 2,          April 4,
                                                         2000              1999
                                                      ---------        -----------

<S>                                                   <C>              <C>
Net loss applicable to
   common stock ...............................       ($  1,480)       ($      117)
                                                      =========        ===========
Weighted average number of common
shares outstanding -  Basic earnings per share        5,250,061          5,812,676

Effect of dilutive stock and purchase  options             --                 --
                                                      ---------        -----------

Weighted average number of common
shares outstanding - Diluted earnings per share       5,250,061          5,812,676
                                                      =========        ===========

Net loss per common
 share - Basic ...............................       ($   0.28)       ($     0.02)
                                                      =========        ===========
  share - Fully diluted .......................      ($   0.28)       ($     0.02)
                                                      =========        ===========
</TABLE>




                                 Page 12 of 14
<PAGE>



PART II - OTHER INFORMATION


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 11               (Regulation S-K) Computation of Earnings Per Share.

Exhibit 27               Financial Data Schedule

Reports on Form 8-K

     No  Reports  on Form 8-K were filed by the  registrant  during the  periods
covered by this report.



                                 Page 13 of 14
<PAGE>






                                   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.

                                          FARREL CORPORATION
                                          ------------------
                                          REGISTRANT


DATE:      May 16, 2000                   /s/ Rolf K. Liebergesell
           ---------------                ------------------------
                                          ROLF K. LIEBERGESELL
                                          CHIEF EXECUTIVE OFFICER, PRESIDENT
                                          AND CHAIRMAN OF THE BOARD





DATE:      May 16, 2000                   /s/ Walter C. Lazarcheck
           ---------------                -------------------------
                                          WALTER C. LAZARCHECK
                                          VICE PRESIDENT/CHIEF FINANCIAL OFFICER
                                          (CHIEF ACCOUNTING OFFICER)



                                 Page 14 of 14