**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





**(Mark
      one)**





x
              QUARTERLY
                  REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES  EXCHANGE
                  ACT OF 1934




For
      the
      Quarterly Period ended July 31, 2008





**OR**


o
                TRANSITION
                    REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES  EXCHANGE
                    ACT OF 1934




For
      the
      transition period from __________ to __________





Commission
      File No. 1-8061





**FREQUENCY
      ELECTRONICS, INC.**


(Exact
      name of Registrant as specified in its charter)





**Delaware**
            **11-1986657**(State or other jurisdiction of
            (I.R.S. Employer Identification No.)incorporation or organization)





**55 CHARLES LINDBERGH BLVD., MITCHEL FIELD, N.Y.**
            **11553**(Address of principal executive offices)
            (Zip Code)





Registrant's telephone
      number, including area code: **516-794-4500**





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
o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):




Large
      accelerated filer o Accelerated
      filer o  Non-accelerated filer o  Smaller
      Reporting Company  x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes
o  No
x





APPLICABLE
      ONLY TO CORPORATE ISSUERS:





The
      number of shares outstanding of Registrant's Common Stock, par value $1.00
      as of
      September 11, 2008 - 8,065,462










FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES





INDEX





Page
                No.Part
              I. Financial Information:Item
                1 - Financial Statements:Condensed
                Consolidated Balance Sheets -
              July
                31, 2008 and April 30, 2008
            3Condensed
                Consolidated Statements of Operations
              Three
                Months Ended July 31, 2008 and 2007
            4Condensed
                Consolidated Statements of Cash Flows
              Three
                Months Ended July 31, 2008 and 2007
            5Notes
                to Condensed Consolidated Financial Statements
            6-9Item
                2 - Management's Discussion and Analysis of
              Financial
                Condition and Results of Operations
            9-14Item
                4T- Controls and Procedures
            15-16Part
                II. Other Information:Items
                1, 1A, 2, 3, 4 and 5 are omitted because they are not
                applicableItem
                6 - Exhibits
            16Signatures
            17Exhibits


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      ELECTRONICS, INC. and SUBSIDIARIES


Condensed
      Consolidated Balance Sheets







July
                31,
            
            April
                30,2008
            
            2008(UNAUDITED)
            
            (AUDITED)(NOTE
                A)(In
                thousands except share data)**ASSETS:**Current
                assets:Cash
                and cash equivalents
            
            $
            3,745
            
            $
            11,029Marketable
                securities
            
            
            10,616
            
            
            4,414Accounts
                receivable, net of allowance for doubtful accounts of $185 at July
                31 and
                April 30, 2008
            
            
            13,729
            
            
            10,271Costs
                and estimated earnings in excess of billings
            
            
            7,143
            
            
            9,556Inventories
            
            
            30,930
            
            
            30,218Deferred
                income taxes
            
            
            4,133
            
            
            3,974Income
                taxes receivable
            
            
            469
            
            
            151Prepaid
                expenses and other
            
            
            1,029
            
            
            1,371Total
                current assets
            
            
            71,794
            
            
            70,984Property,
                plant and equipment, at cost, less accumulated depreciation and
                amortization
            
            
            9,139
            
            
            9,531Deferred
                income taxes
            
            
            2,990
            
            
            2,990Goodwill
                and other intangible assets, net
            
            
            358
            
            
            405Cash
                surrender value of life insurance and cash held in trust
            
            
            7,797
            
            
            7,671Investments
                in and loans receivable from affiliates
            
            
            4,559
            
            
            4,522Other
                assets
            
            
            817
            
            
            817**Total
                assets**
            
            $
            97,454
            
            $
            96,920**LIABILITIES
                AND STOCKHOLDERS’ EQUITY:**Current
                liabilities:Short-term
                credit obligations
            
            $
            6,723
            
            $
            5,168Accounts
                payable - trade
            
            
            2,166
            
            
            2,215Accrued
                liabilities and other
            
            
            4,314
            
            
            4,694Total
                current liabilities
            
            
            13,203
            
            
            12,077Lease
                obligation – noncurrent
            
            
            856
            
            
            911Deferred
                compensation
            
            
            9,591
            
            
            9,467Deferred
                gain and other liabilities
            
            
            766
            
            
            855Total
                liabilities
            
            
            24,416
            
            
            23,310Stockholders’
                equity:Preferred
                stock - $1.00 par value
            
            
            -
            
            
            -Common
                stock - $1.00 par value
            
            
            9,164
            
            
            9,164Additional
                paid-in capital
            
            
            48,463
            
            
            48,213Retained
                earnings
            
            
            12,785
            
            
            13,55870,412
            
            
            70,935Common
                stock reacquired and held in treasury -at cost, 420,826 shares at
                July 31,
                2008 and 427,366 shares at April 30, 2008
            
            
            (2,217
            )
            
            (2,175
            )Accumulated
                other comprehensive income
            
            
            4,843
            
            
            4,850Total
                stockholders' equity
            
            
            73,038
            
            
            73,610**Total
                liabilities and stockholders' equity**
            
            $
            97,454
            
            $
            96,920





See
      accompanying notes to condensed consolidated financial
      statements.


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      ELECTRONICS, INC. and SUBSIDIARIES





Condensed
      Consolidated Statements of Operations





Three
      Months Ended July 31,


(Unaudited)





2008
            
            2007(In
                thousands except share data)Net
                sales
            
            $
            13,063
            
            $
            15,557Cost
                of sales
            
            
            9,872
            
            
            11,086Gross
                margin
            
            
            3,191
            
            
            4,471Selling
                and administrative expenses
            
            
            3,116
            
            
            3,086Research
                and development expense
            
            
            1,365
            
            
            2,177Operating
                loss
            
            
            (1,290
            )
            
            (792
            )Other
                income (expense):Investment
                income
            
            
            158
            
            
            3,243Equity
                income (loss)
            
            
            37
            
            
            (80
            )Interest
                expense
            
            
            (84
            )
            
            (131
            )Other
                income (expense), net
            
            
            81
            
            
            -(Loss)
                Income before (benefit) provision for income taxes
            
            
            (1,098
            )
            
            2,240(Benefit)
                Provision for income taxes
            
            
            (325
            )
            
            860Net
                (loss) income
            
            $
            (773
            )
            $
            1,380Net
                (loss) income per common share:Basic
            
            $
            (0.09
            )
            $
            0.16Diluted
            
            $
            (0.09
            )
            $
            0.16Average
                shares outstanding:Basic
            
            
            8,742,086
            
            
            8,695,027Diluted
            
            
            8,742,086
            
            
            8,783,676





See
      accompanying notes to condensed consolidated financial
      statements.


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      ELECTRONICS, INC. and SUBSIDIARIES





Condensed
      Consolidated Statements of Cash Flows





Three
      Months Ended July 31,


(Unaudited)





2008
            
            2007(In
                thousands)Cash
                flows from operating activities:Net
                (loss) income
            
            $
            (773
            )
            $
            1,380Gain
                on sale of investments
            
            
            -
            
            
            (3,015
            )Other
                non-cash charges to earnings
            
            
            811
            
            
            1,015Net
                changes in other assets and liabilities
            
            
            (2,108
            )
            
            (3,777
            )Net
                cash used in operating activities
            
            
            (2,070
            )
            
            (4,397
            )Cash
                flows from investing activities:Proceeds
                from sale of marketable securities and investments
            
            
            -
            
            
            5,643Purchase
                of marketable securities
            
            
            (6,586
            )
            
            (174
            )Capital
                expenditures
            
            
            (111
            )
            
            (559
            )Net
                cash (used in) provided by investing activities
            
            
            (6,697
            )
            
            4,910Cash
                flows from financing activities:Proceeds
                from short-term credit obligations
            
            
            1,500
            
            
            1,500Payment
                of short-term credit and lease obligations
            
            
            (52
            )
            
            -Payment
                of cash dividend
            
            
            -
            
            
            (869
            )Stock
                transactions, net
            
            
            (100
            )
            
            (2
            )Net
                cash provided by financing activities
            
            
            1,348
            
            
            629Net
                (decrease) increase in cash and cash equivalents
              before
                effect of exchange rate changes
            
            
            (7,419
            )
            
            1,142Effect
                of exchange rate changes on cash and cash equivalents
            
            
            135
            
            
            626Net
                (decrease) increase in cash and cash equivalents
            
            
            (7,284
            )
            
            1,768Cash
                and cash equivalents at beginning of period
            
            
            11,029
            
            
            1,336Cash
                and cash equivalents at end of period
            
            $
            3,745
            
            $
            3,104Supplemental
                disclosures of cash flow information:Cash
                paid during the period for:Interest
            
            $
            32
            
            $
            573Income
                Taxes
            
            
            -
            
            
            -




See
      accompanying notes to condensed consolidated financial
      statements.


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      ELECTRONICS, INC. and SUBSIDIARIES





Notes
      to
      Condensed Consolidated Financial Statements


(Unaudited)





NOTE
      A -
      CONSOLIDATED FINANCIAL STATEMENTS





In
      the
      opinion of management of Frequency Electronics, Inc. (“the Company”), the
      accompanying unaudited condensed consolidated interim financial statements
      reflect all adjustments (which include only normal recurring adjustments)
      necessary to present fairly, in all material respects, the consolidated
      financial position of the Company as of July 31, 2008 and the results of its
      operations and cash flows for the three months ended July 31, 2008 and 2007.
      The
      April 30, 2008 condensed consolidated balance sheet was derived from audited
      financial statements. Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted. It is suggested that
      these
      condensed consolidated financial statements be read in conjunction with the
      financial statements and notes thereto included in the Company's April 30,
      2008
      Annual Report to Stockholders. The results of operations for such interim
      periods are not necessarily indicative of the operating results for the full
      year.




NOTE
      B -
      EARNINGS PER SHARE





Reconciliation
      of the weighted average shares outstanding for basic and diluted Earnings Per
      Share are as follows:




Three months ended July 31,2008
            
            2007Basic
                EPS Shares outstanding(weighted
                average)
            
            
            8,742,086
            
            
            8,695,027Effect
                of Dilutive Securities
            
            
            ***
            
            
            88,649Diluted
                EPS Shares outstanding
            
            
            8,742,086
            
            
            8,783,676





***Dilutive
      securities are excluded for the three-month period ended July 31, 2008 since
      the
      inclusion of such shares would be antidilutive due to the net loss for the
      period then ended.




The
      computation of diluted earnings per share excludes those options and stock
      appreciation rights with an exercise price in excess of the average market
      price
      of the Company’s common shares during the periods presented. The inclusion of
      such options in the computation of earnings per share would have been
      antidilutive. The number of excluded options for the three
      months ended July 31, 2008 and 2007 were 1,408,675 and 949,425,
      respectively.




NOTE
      C –
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS




At
      July
      31, 2008 and April 30, 2008 costs and estimated earnings in excess of billings
      on uncompleted contracts accounted for on the percentage of completion basis
      were approximately $7,143,000 and $9,556,000, respectively. Such amounts
      represent revenue recognized on long-term contracts that had not been billed
      at
      the balance sheet dates. Such amounts are billed pursuant to contract
      terms.




NOTE
      D -
      INVENTORIES




Inventories,
      which are reported net of reserves of $6,219,000 and $6,206,000 at July 31,
      2008
      and April 30, 2008, respectively, consist of the following:





July 31, 2008
            
            April
                30, 2008(In thousands)Raw
                materials and Component parts
            
            $
            12,776
            
            $
            12,523Work
                in progress
            
            
            14,164
            
            
            13,938Finished
                Goods
            
            
            3,990
            
            
            3,757$
            30,930
            
            $
            30,218




As
      of
      July 31, 2008 and 2007, approximately $23.2 million and $22.9 million,
      respectively, of total inventory is located in the United States, approximately
      $6.4 million and $5.8 million, respectively, is in Belgium and $1.3 million
      and
      $1.5 million, respectively, is in China.


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      ELECTRONICS, INC. and SUBSIDIARIES





Notes
      to
      Condensed Consolidated Financial Statements


(Unaudited)




NOTE
      E –
COMPREHENSIVE INCOME




For
      the
      three months ended July 31, 2008 and 2007, total comprehensive (loss) income
      was
      ($780,000) and $2,013,000, respectively. Comprehensive income or loss is
      composed of net income or loss for the period plus the impact of foreign
      currency translation adjustments and the change in the valuation allowance
      on
      marketable securities.




NOTE
      F –
SEGMENT INFORMATION




The
      Company operates under three reportable segments:


(1)
            FEI-NY
                – consists principally of precision time and frequency control products
                used in three principal markets: communication satellites (both commercial
                and U.S. Government-funded); terrestrial cellular telephone or other
                ground-based telecommunication stations and other components and
                systems
                for the U.S. military.


(2)
            Gillam-FEI
                - the Company’s Belgian subsidiary primarily sells wireline
                synchronization and network management
                systems.


(3)
            FEI-Zyfer
                - the products of the Company’s subsidiary incorporate Global Positioning
                System (GPS) technologies into systems and subsystems for secure
                communications, both government and commercial, and other locator
                applications.




The
      FEI-NY segment also includes the operations of the Company’s wholly-owned
      subsidiary, FEI-Asia, which functions primarily as a manufacturing facility
      for
      the FEI-NY segment.




The
      Company’s Chief Executive Officer measures segment performance based on total
      revenues and profits generated by each geographic center rather than on the
      specific types of customers or end-users or types of markets served.




The
      table
      below presents information about reported segments with reconciliation of
      segment amounts to consolidated amounts as reported in the statement of
      operations or the balance sheet for each of the periods (in
      thousands):




Three months ended July 31,2008
            
            2007Net
                sales:FEI-NY
            
            $
            8,844
            
            $
            11,765Gillam-FEI
            
            
            2,619
            
            
            2,288FEI-Zyfer
            
            
            2,303
            
            
            2,022less
                intercompany sales
            
            
            (703
            )
            
            (518
            )Consolidated
                Sales
            
            $
            13,063
            
            $
            15,557Operating
                (loss) profit:FEI-NY
            
            $
            (1,228
            )
            $
            (540
            )Gillam-FEI
            
            
            (55
            )
            
            (143
            )FEI-Zyfer
            
            
            74
            
            
            3Corporate
            
            
            (81
            )
            
            (112
            )Consolidated
                Operating (Loss) Profit
            
            $
            (1,290
            )
            $
            (792
            )




July 31, 2008
              
              April 30, 2008Identifiable
                  assets:FEI-NY
              
              $
              55,167
              
              $
              54,522Gillam-FEI
              
              
              19,309
              
              
              18,611FEI-Zyfer
              
              
              6,544
              
              
              6,538less
                  intercompany balances
              
              
              (17,539
              )
              
              (17,786
              )Corporate
              
              
              33,973
              
              
              35,035Consolidated
                  Identifiable Assets
              
              $
              97,454
              
              $
              96,920


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      ELECTRONICS, INC. and SUBSIDIARIES





Notes
      to
      Condensed Consolidated Financial Statements


(Unaudited)





NOTE
      G –
RELATED PARTY TRANSACTIONS




During
      the three month periods ended July 31, 2008 and 2007, the Company acquired
      technical services from Elcom Technologies, Inc. (“Elcom”) in the amount of
      approximately $75,000 and $259,000, respectively, and purchased product from
      Morion Inc. in the amount of approximately $212,000 and $79,000, respectively.
      The Company also recorded interest income on Elcom’s convertible note in the
      amount of approximately $19,000 and $31,000 in the first quarters of fiscal
      years 2009 and 2008, respectively. Subsequent to July 31, 2008, the Company
      acquired from Elcom 29,651 shares of its outstanding common stock at an
      aggregate cost of approximately $150,000. The amount paid was at the market
      value of the Company’s common stock on the date of purchase.




NOTE
      H –
SUBSEQUENT EVENTS




On
      September 11, 2008, the Company announced that it had acquired 615,000 shares
      of
      its outstanding common stock in a block transaction with what had been its
      largest institutional shareholder. Coupled with other purchases of common stock
      subsequent to July 31, 2008, the Company acquired a total of 659,651 shares
      at
      an aggregate average price per share of $4.34. With these purchases, the Company
      has acquired approximately $4 million of its common stock out of the total
      authorization of $5 million.




NOTE
      I -
      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS




In
      September 2006, the FASB issued Statement No. 157, “Fair Value Measurements.”
(“FAS 157”) This statement defines fair value, establishes a framework for
      measuring fair value in generally accepted accounting principles (“GAAP”) and
      expands disclosures about fair value measurements. FAS 157 does not require
      any
      new fair value measurements but simplifies and codifies related guidance. The
      Company adopted FAS 157 in fiscal year 2009. Such adoption did not have a
      material impact on the Company’s financial statements.




In
      February 2007, the FASB issued Statement No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities including an amendment of SFAS No.
      115” (“FAS 159”). The new statement allows entities to choose, at specified
      election dates, to measure eligible financial assets and liabilities at fair
      value that are not otherwise required to be measured at fair value. If a company
      elects the fair value option for an eligible item, changes in that item’s fair
      value in subsequent reporting periods must be recognized in current earnings.
      FAS 159 is effective for fiscal years beginning after November 15, 2007. The
      adoption of FAS 159 in fiscal year 2009 had no impact on the Company’s financial
      statements since the Company elected not to measure any financial assets or
      liabilities at fair value other than those for which previous pronouncements
      required it to do so.




In
      December 2007, the FASB issued Statements No. 141(R), “Business Combinations”,
      and No. 160, “Noncontrolling Interests in Consolidated Financial Statements.”
Effective for fiscal years beginning after December 15, 2008, these statements
      revise and converge internationally the accounting for business combinations
      and
      the reporting of noncontrolling interests in consolidated financial statements.
      The adoption of these statements will change the Company’s accounting treatment
      for business combinations on a prospective basis.




In
      March
      2008, the FASB issued Statement No.161, Disclosures about Derivative Instruments
      and Hedging Activities - An Amendment of FASB Statement No. 133 (“FAS 161”). FAS
      161 requires enhanced qualitative disclosures about objectives and strategies
      for using derivatives, quantitative disclosures about fair value amounts of
      and
      gains and losses on derivative instruments, and disclosures about
      credit-risk-related contingent features in derivative agreements. FAS 161 is
      effective for financial statements issued for fiscal years and interim periods
      beginning after November 15, 2008. The Company is currently evaluating the
      impact of FAS 161 on its consolidated financial statements although it does
      not
      anticipate that the statement will have a material impact since the Company
      has
      not historically engaged in hedging activities or acquired derivative
      instruments.


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(Continued)




In
      May 2008, the FASB issued Statement of Financial Accounting Standards No.
      162 (“FAS 162”), “The Hierarchy of Generally Accepted Accounting Principles.”
FAS 162 identifies the sources of accounting principles and the framework for
      selecting the principles to be used in the preparation of financial statements
      of nongovernmental entities that are presented in conformity with U.S. GAAP.
      FAS
      162 will become effective 60 days following the SEC’s approval of the Public
      Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of
      Present Fairly in Conformity With Generally Accepted Accounting Principles.”
This statement is not expected to change the Company’s current accounting
      practice.




In
      April
      2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
      Intangible Assets” (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that
      should be considered in developing a renewal or extension assumptions used
      for
      purposes of determining the useful life of a recognized intangible asset under
      SFAS No. 142, “Goodwill and Other Intangible Assets (“FAS 142”). FSP
      FAS 142-3 is intended to improve the consistency between the useful life of
      a recognized intangible asset under SFAS 142 and the period of expected
      cash flows used to measure the fair value of the asset under SFAS 141 (R)
      and other U.S. generally accepted accounting principles. FSP FAS 142-3
      is effective for fiscal years beginning after December 15, 2008. Earlier
      application is not permitted. The Company will be assessing the potential effect
      of FSP FAS 142-3 if applicable, once we enter into a business
      combination




On
      December 21, 2007, the Securities and Exchange Commission issued Staff
      Accounting Bulletin No. 110 ("SAB 110”) to permit entities, under certain
      circumstances to continue to use the "simplified" method, in developing
      estimates of expected term of "plain-vanilla" share options in accordance with
      Statement No. 123R Share-Based Payment. SAB
      110
      amended SAB 107 to permit the use of the "simplified" method beyond December
      31,
      2007. The Company believes that the adoption of SAB 110 will not have a material
      impact on its consolidated financial statements.







**Item
      2**




**Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations**





*“Safe
      Harbor” Statement under the Private Securities Litigation Reform Act of
      1995* :




The
      statements in this quarterly report on Form 10-Q regarding future earnings
      and
      operations and other statements relating to the future constitute
      "forward-looking" statements pursuant to the safe harbor provisions of the
      Private Securities Litigation Reform Act of 1995. Forward-looking statements
      inherently involve risks and uncertainties that could cause actual results
      to
      differ materially from the forward-looking statements. Factors that would cause
      or contribute to such differences include, but are not limited to, continued
      acceptance of the Company's products in the marketplace, competitive factors,
      new products and technological changes, product prices and raw material costs,
      dependence upon third-party vendors, competitive developments, changes in
      manufacturing and transportation costs, changes in contractual terms, the
      availability of capital, and other risks detailed in the Company's periodic
      report filings with the Securities and Exchange Commission. By making these
      forward-looking statements, the Company undertakes no obligation to update
      these
      statements for revisions or changes after the date of this report.




**Critical
      Accounting Policies and Estimates**




The
      Company’s significant accounting policies are described in Note 1 to the
      consolidated financial statements included in the Company’s April 30, 2008
      Annual Report to Stockholders. The Company believes its most critical accounting
      policies to be the recognition of revenue and costs on production contracts
      and
      the valuation of inventory. Each of these areas requires the Company to make
      use
      of reasoned estimates including estimating the cost to complete a contract,
      the
      realizable value of its inventory or the market value of its products. Changes
      in estimates can have a material impact on the Company’s financial position and
      results of operations.


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(Continued)





Revenue
      Recognition




Revenues
      under long-term contracts which generally require billings based on achievement
      of milestones rather than delivery of product, are reported in operating results
      using the percentage of completion method. On fixed-price contracts, which
      are
      typical for commercial and U.S. Government satellite programs and other
      long-term U.S. Government projects, and which require initial design and
      development of the product, revenue is recognized on the cost-to-cost method.
      Under this method, revenue is recorded based upon the ratio that incurred costs
      bear to total estimated contract costs with related cost of sales recorded
      as
      the costs are incurred. Each month management reviews estimated contract costs
      through a process of aggregating actual costs incurred and updating estimated
      costs to completion based upon the current available information and status
      of
      the contract. The effect of any change in the estimated gross margin percentage
      for a contract is reflected in revenues in the period in which the change is
      known. Provisions for anticipated losses on contracts are made in the period
      in
      which they become determinable.




On
      production-type contracts, revenue is recorded as units are delivered with
      the
      related cost of sales recognized on each shipment based upon a percentage of
      estimated final program costs. Changes in job performance may result in
      revisions to costs and income and are recognized in the period in which
      revisions are determined to be required. Provisions for anticipated losses
      on
      contracts are made in the period in which they become determinable.




For
      customer orders in the Company’s Gillam-FEI and FEI-Zyfer segments or
      nonlong-term contracts or orders in the FEI-NY segment, sales of products and
      services to customers are reported in operating results based upon (i) shipment
      of the product or (ii) performance of the services pursuant to terms of the
      customer order. When payment is contingent upon customer acceptance of the
      installed system, revenue is deferred until such acceptance is received and
      installation completed.




Costs
      and Expenses




Contract
      costs include all direct material, direct labor costs, manufacturing overhead
      and other direct costs related to contract performance. Selling, general and
      administrative costs are charged to expense as incurred.




Inventory




Inventoried
      costs contain amounts relating to contracts and programs with long production
      cycles, a portion of which will not be realized within one year. Inventory
      reserves are established for slow-moving and obsolete items and are based upon
      management’s experience and expectations for future business. Any changes in
      reserves are reflected in cost of sales in the period the revision is made.




**RESULTS
      OF OPERATIONS**




The
      table
      below sets forth for the respective periods of fiscal years 2009 and 2008 the
      percentage of consolidated net sales represented by certain items in the
      Company’s consolidated statements of operations:




Three months ended July 31,2008
            
            2007Net
                SalesFEI-NY
            
            
            67.7
            %
            
            75.6
            %Gillam-FEI
            
            
            20.0
            
            
            14.7FEI-Zyfer
            
            
            17.6
            
            
            13.0Less
                Intersegment Sales
            
            
            (5.3
            )
            
            (3.3
            )100.0
            
            
            100.0Cost
                of Sales
            
            
            75.6
            
            
            71.3Gross
                Margin
            
            
            24.4
            
            
            28.7Selling
                and administrative expenses
            
            
            23.9
            
            
            19.8Research
                and development expenses
            
            
            10.4
            
            
            14.0Operating
                Loss
            
            
            (9.9
            )
            
            (5.1
            )Other
                income, net
            
            
            1.5
            
            
            19.5Pretax
                (Loss) Income
            
            
            (8.4
            )
            
            14.4(Benefit)
                Provision for income taxes
            
            
            (2.5
            )
            
            5.5Net
                (Loss) Income
            
            
            (5.9
            )%
            
            8.9
            %


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FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES


(Continued)




(Note:
      All dollar amounts in following tables are in thousands, except Net Sales which
      are in millions)




**Net
      sales**





(in
                millions)Three
                months ended July 31,2008
            
            2007
            
            ChangeFEI-NY
            
            $
            8.9
            
            $
            11.8
            
            $
            (2.9
            )
            
            (25
            )%Gillam-FEI
            
            
            2.6
            
            
            2.3
            
            
            0.3
            
            
            14
            %FEI-Zyfer
            
            
            2.3
            
            
            2.0
            
            
            0.3
            
            
            14
            %Intersegment
                sales
            
            
            (0.7
            )
            
            (0.5
            )
            
            (0.2
            )$
            13.1
            
            $
            15.6
            
            $
            (2.5
            )
            
            (16
            )%




The
      decrease in revenues for the three m onth
      period ended July 31, 2008 compared to the same period of fiscal year 2008,
      was
      primarily the result of lower revenues from satellite payload programs recorded
      in the FEI-NY segment. Satellite revenues were reduced as a consequence of
      higher than anticipated levels of engineering and manufacturing costs which
      were
      incurred in the fourth quarter of fiscal year 2008 and carried over into the
      fiscal year 2009 quarter. These additional costs reduced the expected gross
      margins of these programs on which revenue is recognized on the percentage
      of
      completion basis. Sequentially, satellite payload revenues increased from the
      levels reported during the fourth quarter of fiscal year 2008. Revenues from
      telecommunication customers which are recorded in each of the Company’s
      operating segments and revenues from non-space U.S. Government customers which
      are recorded in the FEI-NY and FEI-Zyfer segments, were essentially flat year
      over year. During fiscal year 2009, the Company expects revenues from both
      U.S.
      Government and commercial satellite programs to increase from current levels
      as
      a result of recent contract awards and expectations for additional contract
      awards during this fiscal year. Telecommunication infrastructure revenues and
      sales to non-space U.S. Government programs are also expected to increase over
      the balance of the fiscal year.




**Gross
      margin**





Three
                months ended July 31,2008
            
            
            2007
            
            
            Change$
            3,191
            
            $
            4,471
            
            $
            (1,280
            )
            
            (29
            )%GM
                Rate
            
            
            24.4
            %
            
            28.7
            %




The
      29%
      decrease in gross margin for the three months ended July 31, 2008, is due to
      lower revenues and higher levels of engineering and manufacturing costs on
      certain satellite payload programs that the Company began to experience in
      late
      fiscal year 2008. The current quarter’s gross margin rate of 24.4% reflects a
      sequential improvement from the 16% rate recorded in the fourth quarter of
      fiscal year 2008 which was also impacted by a high level of engineering and
      manufacturing costs on the same satellite payload programs. As the level of
      engineering effort decreases and these satellite programs are completed during
      fiscal year 2009, the Company anticipates that its gross margin rate will
      significantly improve.




**Selling
      and administrative expenses**


Three months ended July 31,2008
              
              2007
              
              Change$
              3,116
              
              $
              3,086
              
              $
              30
              
              
              1
              %




For
      the
      three months ended July 31, 2008 and 2007, selling and administrative expenses
      were 23.9% and 19.8%, respectively, of consolidated revenues. The Company’s
      target for such expenses is not to exceed 20% of revenues. In the fiscal year
      2009 period, this ratio was not achieved due to a lower level of sales and
      increases in professional fees, marketing expenses, and the operating expenses
      at Gillam-FEI resulting primarily from the impact of the declining value of
      the
      US dollar compared to the Euro. In subsequent quarters of fiscal year 2009,
      the
      Company expects selling and administrative expenses to be incurred at 20% or
      less of revenues both by controlling costs as well as increasing
      revenues.




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FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES


(Continued)




**Research
      and development expense**




Three
                  months ended July 31,2008
              
              2007
              
              Change$
              1,365
              
              $
              2,177
              
              $
              (812
              )
              
              (37
              )%




Research
      and development expenditures represent investments that keep the Company’s
      products at the leading edge of time and frequency technology and enhance
      competitiveness for future sales. In the period ended July 31, 2007, the Company
      incurred exceptional levels of engineering spending and development work on
      its
      satellite payload products. This effort abated throughout fiscal year 2008.
      Research and development spending for the quarter ended July 31, 2008, was
      10.4%
      of revenues compared to 14% of revenues for the same period of fiscal year
      2008.
      The Company targets research and development spending at approximately 10%
      of
      sales, but the rate of spending can increase or decrease from quarter to quarter
      as new projects are identified and others are concluded. The Company will
      continue to devote significant resources to develop new products, enhance
      existing products and implement efficient manufacturing processes. In fiscal
      2009, many of the Company development resources will be applied to certain
      cost-plus-fee satellite payload programs. As a consequence, some of the
      Company’s development expenditures will be customer-funded thus reducing the
      level of internal research and development spending. Internally generated cash
      and cash reserves are adequate to fund these development efforts.




**Operating** **Loss**


Three
                  months ended July 31,2008
              
              2007
              
              Change$
              (1,290
              )
              $
              (792
              )
              $
              (498
              )
              
              (63
              )%




Lower
      revenues and the continuing level of engineering and manufacturing effort
      related to satellite payload programs resulted in an operating loss for the
      three months ended July 31, 2008, compared to the same period of fiscal year
      2008. Sequentially, the operating loss was reduced by $2.0 million from that
      realized in the fourth quarter of fiscal year 2008, on a lower level of sales.
      The Company anticipates that as the gross margin rate improves and as sales
      increase from current levels, that it will generate an operating profit for
      the
      full fiscal year 2009.




**Other
      income (expense)**





Three
                months ended July 31,2008
            
            2007
            
            ChangeInvestment
                income
            
            $
            158
            
            $
            3,243
            
            $
            (3,085
            )
            
            (95
            )%Equity
                (loss) income
            
            
            37
            
            
            (80
            )
            
            117
            
            
            NMInterest
                expense
            
            
            (84
            )
            
            (131
            )
            
            47
            
            
            36
            %Other
                income, net
            
            
            81
            
            
            -
            
            
            81
            
            
            NM$
            192
            
            $
            3,032
            
            $
            (2,840
            )
            
            (94
            )%




During
      the three months ended July 31, 2007, the Company reduced its investment in
      Morion, Inc. from 36.6% to 8% by selling shares to a Russian government
      majority-owned bank. The Company received proceeds of approximately $5.8 million
      and realized a book gain of approximately $3.0 million. Such gain is included
      in
      investment income for the first quarter of fiscal year 2008. Comparable gains
      were not recorded during the first quarter of fiscal year 2009.




The
      equity income or (loss) in the fiscal year 2009 and 2008 periods represent
      the
      Company’s share of the quarterly income or (loss) recorded by Elcom Technologies
      in which the Company owns a 25% interest.




The
      decrease in interest expense for the three month period ended July 31, 2008,
      resulted from both a decrease in borrowings under the Company’s line of credit
      as well as a lower rate of interest charged on such borrowings compared to
      the
      three month period ended July 31, 2007.




Under
      the
      provisions of sale and leaseback accounting, a portion of the capital gain
      realized on a fiscal year 2005 real estate transaction is deferred and
      recognized in income over the initial lease term. Under the caption “Other
      income, net” the Company recognized deferred gain of $88,000 for each of the
      three months ended July 31, 2008 and 2007. In the fiscal year 2008 period,
      deferred gain income was offset by certain nonrecurring expenses at the FEI-NY
      and Gillam-FEI segments, including certain business interruption costs and
      foreign currency exchange losses. Other insignificant income and expense items
      are also recorded under this caption.




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          of 17


FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES


(Continued)




**Net
      (Loss) income**


Three
                  months ended July 31,2008
              
              2007
              
              Change$
              (773
              )
              $
              1,380
              
              $
              (2,153
              )
              
              (156
              )%




Net
      loss
      for the three months ended July 31, 2008, resulted from the decrease in sales
      and the higher engineering and production costs on certain satellite programs
      as
      discussed above. The fiscal year 2008 results were positively impacted by the
      investment gain recorded on the sale of a portion of the Company’s investment in
      Morion which offset the prior year quarter’s operating loss. The Company expects
      to realize improved gross and operating margins in the subsequent quarters
      of
      fiscal year 2009 and anticipates that it will report a profit for the full
      year.




**Income
      Taxes**




The
      Company is subject to taxation in several countries as well as the states of
      New
      York and California. The statutory federal rates vary from 34% in the United
      States to 35% in Europe. The effective rate is impacted by the income or loss
      of
      certain of the Company’s European and Asian subsidiaries which are currently not
      taxed. In addition, the Company utilizes the availability of research and
      development tax credits in the United States to lower its tax rate. As of April
      30, 2008, the Company’s European subsidiaries had available net operating loss
      carryforwards of approximately $1.2 million, which will offset future taxable
      income. The Company’s effective tax rate for fiscal year 2008 was higher than in
      prior years as a result of the gain recognized on the Morion transaction. The
      Company’s tax basis in its Morion investment was less than its book basis
      resulting in greater taxable income than that recorded for financial reporting
      purposes.




LIQUIDITY
      AND CAPITAL RESOURCES




The
      Company’s balance sheet continues to reflect a strong working capital position
      of $59
      million at July 31, 2008, which is comparable to working capital at April 30,
      2008. Included in working capital at July 31, 2008 is $14.4 million of cash,
      cash equivalents and marketable securities which are offset by $6.5 million
      in
      borrowings under its bank line of credit. The Company’s current ratio at July
      31, 2008 is 5.4 to 1.




For
      the
      three months ended July 31, 2008, the Company used $2. 1
      million
      in cash from operating activities compared to $4.4 million used by operations
      in
      the comparable fiscal year 2008 period. The primary uses of cash in the fiscal
      year 2009 period were due to the growth in accounts receivable, acquisition
      of
      additional parts inventory to support current and anticipated programs. In
      the
      three month period ended July 31, 2007, the decrease in operating cash flow
      was
      due primarily to increases in unbilled accounts receivable, inventory and
      payments against accounts payable. For the balance of fiscal year 2009, the
      Company expects to generate positive cash flow from operating activities,
      particularly as billing milestones are achieved on certain of its large
      satellite production contracts.




Net
      cash
      used in investing activities for the three months ended July 31, 2008, was
      $6.7
      million compared to cash provided by investing activities of $4.9 million for
      the same period of fiscal year 2008. During the fiscal year 2009 period, the
      Company invested $6.6 million in marketable securities and acquired additional
      fixed assets for $111,000. In the first quarter of the prior year, the Company
      received net proceeds of $5.6 million from the sale of a portion of its
      investment in Morion. This cash inflow was partially offset by fixed asset
      acquisitions of $559,000 and the purchase of marketable securities for $174,000.
      The Company may continue to acquire or sell marketable securities as dictated
      by
      its investment strategies as well as by the cash requirements for its
      development activities. Capital equipment purchases for all of fiscal year
      2009
      are expected to aggregate approximately $3.0 million. Internally generated
      cash
      is adequate to acquire this level of capital equipment.




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          of 17


FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES


(Continued)




Net
      cash
      provided by financing activities for the three months ended July 31, 2008,
      was
      $1.3 million compared to $629,000 during the comparable fiscal year 2008 period.
      During the first quarter of fiscal year 2009, the Company borrowed $1.5 million
      against its line of credit, made principle payments of $52,000 against a
      long-term capital lease and reacquired capital stock for treasury in the
      approximate amount of $100,000. During the three months ended July 31, 2007,
      the
      Company paid a cash dividend of $869,000 which was offset by $1.5 million
      borrowed under its line of credit.




The
      Company has been authorized by its Board of Directors to repurchase up to $5
      million worth of shares of its common stock for treasury whenever appropriate
      opportunities arise but it has neither a formal repurchase plan nor commitments
      to purchase additional shares in the future. During the quarter ended July
      31,
      2008, the Company acquired 18,000 shares of its stock under this authorization.
      The average price paid per share was $5.57. Subsequent to the end of the
      quarter, the Company acquired an additional 659,651 shares at an average price
      of $4.34. With these purchases, the Company has acquired approximately $4
      million of its common stock.




The
      Company will continue to expend resources to develop and improve products for
      space applications, guidance and targeting systems, wireless networks and
      wireline communication systems which management believes will result in future
      growth and continued profitability. During fiscal year 2009, the Company intends
      to make investments in more efficient product designs, automatic test equipment,
      employee training and improved manufacturing processes. For the current fiscal
      year and for the foreseeable future, the Company has been awarded several
      cost-plus-fee development contracts for satellite payloads. Such customer-funded
      programs will enable the Company to conduct important development activities
      but
      will be reimbursed for its efforts. Thus, the Company expects to spend its
      own
      funds at a lower rate than it has historically to achieve its development goals.
      Internally generated cash will be adequate to fund these internal research
      and
      development efforts.




As
      of
      July 31, 2008, the Company's consolidated backlog amounted to approximately
      $36
      million. Approximately 80% of this backlog is expected to be filled during
      the
      Company’s fiscal year ending April 30, 2009. Included in the backlog at July 31,
      2008 is approximately $7 million under cost plus fee contracts which the Company
      believes represent firm commitments from its customers for which the Company
      has
      not received full funding to date. The Company excludes from backlog any
      contracts or awards for which it has not received authorization to
      proceed.




**Off-Balance
      Sheet Arrangements**




The
      Company does not have any off-balance sheet arrangements that have or are
      reasonably likely to have a current or future effect on the Company’s financial
      condition, changes in financial condition, revenues or expenses, results of
      operations, liquidity, capital expenditures or capital resources that is
      material to investors.




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            of 17


FREQUENCY
      ELECTRONICS, INC. and SUBSIDIARIES


(Continued)




**Item
      4** **T.**




**Controls
      and Procedures**




Disclosure
      Controls and Procedures .
      The
      Company’s management, with the participation of the Company’s chief executive
      officer and chief financial officer, has evaluated the effectiveness of the
      Company’s disclosure controls and procedures (as such term is defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
      (the “ Exchange
      Act ”))
      as of
      the end of the period covered by this report. There are inherent limitations
      to
      the effectiveness of any system of disclosure controls and procedures, including
      the possibility of human error and the circumvention or overriding of the
      controls and procedures. Accordingly, even effective disclosure controls and
      procedures can only provide reasonable assurance of achieving their control
      objectives. Based on their evaluation, the Company’s chief executive officer and
      chief financial officer have concluded that, as of July 31, 2008, the Company’s
      disclosure controls and procedures were not effective for the reasons discussed
      below, to ensure that information relating to the Company, including its
      consolidated subsidiaries, required to be included in its reports that it filed
      or submitted under the Exchange Act are recorded, processed, summarized and
      reported within the time periods specified in Securities and Exchange Commission
      rules and forms.




Management’s
      Report on Internal Control over Financial Reporting




Management
      of Frequency Electronics is responsible for establishing and maintaining
      adequate internal control over financial reporting as defined in Rules 13a-15(f)
      and 15d-15(f) under the Exchange Act. The Company’s internal control system is
      designed to provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external purposes
      in
      accordance with generally accepted accounting principles. Because of inherent
      limitations, internal control over financial reporting may not prevent or detect
      misstatements. Also, projections of any evaluation of effectiveness to future
      periods are subject to the risk that controls may become inadequate because
      of
      changes in conditions, or that the degree of compliance with the policies or
      procedures may deteriorate.




Management
      has assessed the effectiveness of the Company’s internal control over financial
      reporting as of July 31, 2008. In making this assessment, management used the
      criteria established in Internal Control — Integrated
      Framework issued by the Committee of Sponsoring Organizations of the Treadway
      Commission (COSO). Based on this evaluation, management has concluded that
      the
      Company’s internal control over financial reporting was not effective as of July
      31, 2008. The Company’s chief executive officer and chief financial officer have
      concluded that the Company has material weaknesses in its internal control
      over
      financial reporting.




A
      material weakness is a deficiency, or a combination of deficiencies, in internal
      control over financial reporting, such that there is a reasonable possibility
      that a material misstatement of the Company’s annual or interim financial
      statements will not be prevented or detected on a timely basis.




Financial
      Reporting




The
      Company had inadequate resources and an insufficient number of personnel having
      adequate knowledge, experience and training to provide effective oversight
      and
      review of our internal controls within the prescribed timeframe. As a result,
      as
      of July 31, 2008, there was a material weakness in the Company’s internal
      control because management has not performed a self-assessment or the necessary
      documentation and testing of the internal controls at two of the Company’s
      subsidiaries, Gillam-FEI and FEI-Zyfer. The lack of documentation and testing
      of
      these subsidiaries constitutes a material weakness. In order to remediate this
      material weakness, management will continue to establish policies and procedures
      to provide for the necessary documentation and testing of such internal controls
      over the coming year. During fiscal year 2009, the Company plans to fully
      document and test the internal controls over financial reporting at its
      Gillam-FEI and FEI-Zyfer subsidiaries. If this process identifies material
      weaknesses or significant deficiencies over such internal controls, the Company
      will implement appropriate remediation efforts.




15
          of 17




FREQUENCY
        ELECTRONICS, INC. and SUBSIDIARIES
 (Continued)
  Due
        to
        the Company’s small size and lack of resources and staffing, the Chief Financial
        Officer is actively involved in the preparation of the financial statements
        and
        therefore, cannot provide an independent review and quality assurance function
        within the accounting and financial reporting group. The limited number of
        accounting personnel results in an inability to have independent review and
        approval by the Chief Financial Officer of financial accounting entries.
        There
        is a risk that a material misstatement of the financial statements could
        be
        caused, or at least not be detected in a timely manner, due to this insufficient
        segregation of duties. During fiscal year 2009, the Company plans to remediate
        this material weakness by engaging third-party accounting advisors and by
        creating processes whereby personnel in its Accounting Department (other
        than
        the Chief Financial Officer) will create analysis and original accounting
        entries, which will subsequently be reviewed and approved by the Chief Financial
        Officer.
  Changes
        in Internal Control Over Financial Reporting .
        There
        were no changes in the Company’s internal control over financial reporting (as
        such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
        Act)
        during the quarter ending July 31, 2008 to which this report relates that
        have
        materially affected, or are reasonably likely to materially affect, the
        Company’s internal control over financial reporting.
  PART
        II
 
 ITEMS
        1,
        1A, 2, 3, 4 and 5 are omitted because they are not applicable.
 
 ITEM
        6 -
        Exhibits
 
 31.1
              -
              Certification
                  by the Chief Executive Officer Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.31.2
              -
              Certification
                  by the Chief Financial Officer Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 200232.1
              -
              Certification
                  by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
                  Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.32.2
              -
              Certification
                  by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
                  Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.
  16
            of 17
  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.
 
 FREQUENCY
                  ELECTRONICS, INC.(Registrant)Date:
                  September 15, 2008
              BY
              /s/
                  Alan MillerAlan
                  MillerChief
                  Financial Officerand
                  Treasurer
 
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            of 17