SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10Q

(Mark one)

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

                 For the Quarterly Period ended October 31, 1998

                                       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 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 __

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares  outstanding of Registrant's  Common Stock, par value $1.00
as of December 7, 1998 - 7,681,846

                                  Page 1 of 15
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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                                      INDEX



Part I.  Financial Information:                                     Page No.

  Item 1 - Financial Statements:

      Consolidated Condensed Balance Sheets -
          October 31, 1998 and April 30, 1998                         3-4

      Consolidated Condensed Statements of Operations
          Six Months Ended October 31, 1998 and 1997                   5

      Consolidated Condensed Statements of Operations
          Three Months Ended October 31, 1998 and 1997                 6

      Consolidated Condensed Statements of Cash Flows
          Six Months Ended October 31, 1998 and 1997                   7

      Notes to Consolidated Condensed Financial Statements            8-9

  Item 2 - Management's Discussion and Analysis of
          Financial Condition and Results of Operations              10-13


Part II.  Other Information:

  Item 1 - Legal Proceedings                                          14

  Item 6 - Exhibits and Reports on Form 8-K                           14

  Signatures                                                          15





















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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                      Consolidated Condensed Balance Sheets



                                                   October 31,       April 30,
                                                      1998             1998
                                                   (UNAUDITED)       (NOTE A)
                                                          (In thousands)

ASSETS:

Current assets:

  Cash and cash equivalents                          $ 1,883         $ 8,725

  Marketable securities                               34,205          36,661

  Accounts receivable, net                            18,162          18,640

  Inventories                                          6,992           6,475

  Deferred income taxes                                4,792           5,000

  Insurance receivable, prepaid and other              5,275             986
                                                     -------         -------

            Total current assets                      71,309          76,487

Property, plant and equipment, net                     9,262           9,159

Other assets                                           3,228           3,134
                                                     -------         -------

              Total assets                           $83,799         $88,780
                                                     =======         =======




















     See accompanying notes to consolidated condensed financial statements.

                                     3 of 15
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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                Consolidated Condensed Balance Sheets (Continued)




                                                    October 31,      April 30,
                                                       1998            1998
                                                    (UNAUDITED)      (NOTE A)
                                                           (In thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
 Current maturities of long-term debt                $   479         $   479
 Accounts payable - trade                                531           1,283
 Accrued liabilities and other                         4,441          11,770
                                                     -------         -------
           Total current liabilities                   5,451          13,532

Long term debt net of current maturities                 250             500
Deferred expenses                                      6,571           6,305
Deposit liability and other                           11,934          12,036
                                                     -------         -------
             Total liabilities                        24,206          32,373

Stockholders' equity:
 Preferred stock  - $1.00 par value                      -0-             -0-
 Common stock  -  $1.00 par value                      9,009           9,009
 Additional paid - in capital                         36,761          36,306
 Retained earnings                                    18,964          15,983
                                                     -------         -------
                                                      64,734          61,298

 Common stock reacquired and held in treasury
   -at cost, 1,327,413 shares at October 31, 1988
   and 1,296,913 shares at April 30, 1998             (3,921)         (3,632)
 Unamortized ESOP debt                                  (750)         (1,000)
 Notes receivable - common stock                        (287)           (287)
 Unearned compensation                                   (68)            (89)
 Accumulated other comprehensive (loss) income          (115)            117
                                                     -------         -------
            Total stockholders' equity                59,593          56,407
                                                     -------         -------

     Total liabilities and stockholders' equity      $83,799         $88,780
                                                     =======         =======












     See accompanying notes to consolidated condensed financial statements.

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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                 Consolidated Condensed Statements of Operations

                          Six Months Ended October 31,
                                   (Unaudited)

                                                   1998              1997
                                            (In thousands except per share data)


Net Sales                                        $13,195           $15,317
                                                 -------           -------

Cost of sales                                      8,781             9,902
Insurance reimbursement                           (4,500)                -
Selling and administrative expenses                2,320             2,831
Research and development expenses                  1,966               608
                                                 -------           -------
        Total operating expenses                   8,567            13,341
                                                 -------           -------
             Operating profit                      4,628             1,976

Other income (expense):
     Investment income                             1,091               899
     Interest expense                               (174)             (459)
     Other income (expense), net                     (18)              795
                                                 -------           -------
Earnings before provision for
        income taxes                               5,527             3,211

Income tax provision
        Current                                    1,400               180
        Deferred                                     400                 -
                                                 -------           -------
                                                   1,800               180
                                                 -------           -------

Net earnings                                     $ 3,727           $ 3,031
                                                 =======           =======

Net earnings per common share
        Basic                                    $  0.50           $  0.42
                                                 =======           =======
        Diluted                                  $  0.47           $  0.39
                                                 =======           =======
Average shares outstanding
        Basic                                   7,507,383         7,277,519
                                                =========         =========
        Diluted                                 7,847,101         7,688,532
                                                =========         =========







     See accompanying notes to consolidated condensed financial statements.

                                     5 of 15
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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                 Consolidated Condensed Statements of Operations

                         Three Months Ended October 31,
                                   (Unaudited)


                                                    1998             1997
                                            (In thousands except per share data)


Net Sales                                        $ 6,180           $ 8,016
                                                 -------           -------
Cost of sales                                      4,155             5,082
Insurance reimbursement                           (4,500)                -
Selling and administrative expenses                1,126             1,488
Research and development expenses                  1,171               315
                                                 -------           -------
        Total operating expenses                   1,952             6,885
                                                 -------           -------
             Operating profit                      4,228             1,131

Other income (expense)
     Investment income                               442               458
     Interest expense                                (85)             (226)
     Other income, net                                24               400
                                                 -------           -------
Earnings before provision for
        income taxes                               4,609             1,763

Income tax provision
        Current                                    1,350               130
        Deferred                                      50                 -
                                                 -------           -------
                                                   1,400               130
                                                 -------           -------
Net earnings                                     $ 3,209           $ 1,633
                                                 =======           =======

Net earnings per common share
        Basic                                     $ 0.43            $ 0.22
                                                  ======            ======
        Diluted                                   $ 0.41            $ 0.21
                                                  ======            ======
Average shares outstanding
        Basic                                   7,499,924         7,346,360
                                                =========         =========
        Diluted                                 7,776,478         7,736,792
                                                =========         =========







     See accompanying notes to consolidated condensed financial statements.

                                     6 of 15
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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

                 Consolidated Condensed Statements of Cash Flows

                          Six Months Ended October 31,
                                   (Unaudited)


                                                          1998           1997
                                                             (In thousands)

Cash flows from operating activities:
  Net earnings                                          $ 3,727        $ 3,031
  Non-cash charges to earnings                            1,811          1,376
  Litigation settlement                                  (8,000)             -
  Insurance reimbursement accrual                        (4,500)             -
  Net changes in other assets and liabilities              (209)        (1,913)
                                                        -------        -------
Net cash (used in) provided by operating activities      (7,171)         2,494

Cash flows from investing activities:
  Sale (purchase) of marketable securities                2,317         (3,038)
  Other - net                                              (610)          (468)
                                                        -------        -------
Net cash provided by (used in) investing activities       1,707         (3,506)

Cash flows from financing activities:
  Payment of cash dividend                                 (771)          (746)
  Principal payments of long-term debt
     and deposit liability                                 (330)          (298)
  Purchase of stock for treasury                           (349)             -
  Payments from employees for exercise
     of stock options or notes receivable                    72            956
                                                        -------        -------
Net cash used in financing activities                    (1,378)           (88)

    Net decrease in cash                                 (6,842)        (1,100)

    Cash at beginning of period                           8,725          3,448
                                                        -------        -------

    Cash at end of period                               $ 1,883        $ 2,348
                                                        =======        =======















     See accompanying notes to consolidated condensed financial statements.

                                     7 of 15
<PAGE>

                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements
                                   (Unaudited)

NOTE A - CONSOLIDATED FINANCIAL STATEMENTS

     
     In the opinion of management  of the Company,  the  accompanying  unaudited
     consolidated condensed 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 October 31,  1998 and the results of its  operations  and
     cash flows for the three and six months  ended  October  31, 1998 and 1997.
     The April 30, 1998  consolidated  condensed  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 consolidated condensed financial statements be read
     in conjunction with the financial  statements and notes thereto included in
     the Company's April 30, 1998 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:
                                              Periods ended October 31,
                                         Six months            Three months
                                         ----------            ------------
<TABLE>
<S>                                <C>         <C>         <C>         <C> 
                                      1998        1997       1998        1997
                                   ---------   ---------   ---------   ---------
Basic EPS Shares outstanding
  (weighted average) ...........   7,507,383   7,277,519   7,499,924   7,346,360
Effect of Dilutive Securities ..     339,718     411,013     276,554     390,432
                                   ---------   ---------   ---------   ---------
Diluted EPS Shares outstanding .   7,847,101   7,688,532   7,776,478   7,736,792
                                   =========   =========   =========   =========
</TABLE>

     Options  to  purchase  265,500  and  118,500  shares of common  stock  were
     outstanding  during  the six and  three  months  ended  October  31,  1998,
     respectively,  but were not included in the computation of diluted earnings
     per share  because the  exercise  price of the options was greater than the
     average  market price of the Company's  common shares during the respective
     periods.  Since the inclusion of such options would have been  antidilutive
     they are excluded from the computation.

NOTE C - DEFERRED INCOME TAXES

     As  a  result  of  continued  operating  profits,   the  1998  real  estate
     transactions, the recent litigation settlement and proceeds from directors'
     and officers'  insurance,  the Company expects to fully utilize its tax net
     operating  loss  carryforward.  As a  consequence,  beginning  in the third
     quarter of fiscal 1998, the Company  recorded  deferred  income taxes based
     upon the  differences  between  the  financial  statement  and tax bases of
     assets and  liabilities  using  enacted tax rates in effect for the year in
     which the differences are expected to reverse.  The principal components of
     deferred  taxes  relate to the timing of  deductibility  of the  litigation
     settlement,  certain employee benefits,  accounting for long-term contracts
     and depreciation of property, plant and equipment.

NOTE D - ACCOUNTS RECEIVABLE

     Accounts  receivable  at October 31, 1998 and April 30, 1998 include  costs
     and  estimated  earnings  in excess of billings  on  uncompleted  contracts
     accounted  for on the  percentage  of  completion  basis  of  approximately
     $13,494,000 and $13,618,000,  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.



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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements
                                   (Unaudited)

NOTE E - INVENTORIES

  Inventories, which are reported net of reserves of $904,000 and  $1,400,000 at
  October 31, 1998 and April 30, 1998, respectively, consist of the following:

                                             October 31, 1998     April 30, 1998
                                                        (In thousands)

         Raw materials and Component parts       $ 2,494             $ 2,857
         Work in progress                          4,498               3,618
                                                 -------             -------
                                                 $ 6,992             $ 6,475
                                                 =======             =======

NOTE F - ADOPTION OF SFAS 130, "REPORTING COMPREHENSIVE INCOME"

     As of May 1, 1998, the Company  adopted  Statement of Financial  Accounting
     Standards No. 130, "Reporting  Comprehensive Income" ("SFAS NO. 130"). SFAS
     No.  130   establishes   new  standards   for   reporting  and   displaying
     comprehensive  income and its  components  within the  Company's  financial
     statements;  however,  the  adoption  of SFAS No.  130 has no impact on the
     Company's  net  income  or  stockholders'  equity.  SFAS No.  130  requires
     unrealized  gains and losses on the Company's  marketable  securities to be
     reported in comprehensive income. Prior to adoption of this statement, such
     gains and losses were reported  separately in stockholders'  equity.  Prior
     year  financial  statements  have  been  reclassified  to  conform  to  the
     requirements of SFAS No.
     130.

     During the six-month periods ended October 31, 1998 and 1997, comprehensive
     income was $3,253,000 and $3,314,000,  respectively. For the second quarter
     of fiscal  years 1999 and 1998,  comprehensive  income was  $2,929,000  and
     $1,717,000, respectively.

NOTE G - RECENTLY ISSUED PRONOUNCEMENTS

     The Financial  Accounting  Standards  Board  recently  issued SFAS No. 131,
     "Disclosures  about  Segments of an  Enterprise  and Related  Information,"
     which is effective for the Company in future  periods.  This  pronouncement
     deals with disclosure matters and, upon adoption,  will not have any effect
     on the Company's financial position, results of operations or cash flows.

NOTE H -INSURANCE REIMBURSEMENT AND CONTINGENCIES

     On October 21, 1998, Frequency Electronics,  Inc. ("FEI") settled its claim
     with  the  Associated  International  Insurance  Company  under  applicable
     directors and officers coverage and, on November 17, 1998, received payment
     in the  amount  of $4.5  million.  The  reimbursement  was for  legal  fees
     previously  incurred in defense of criminal and civil suits brought against
     FEI  and  certain  of its  officers  by the  U.S.  Government  and  certain
     individuals.  On June 19, 1998, FEI and the U.S.  Government entered into a
     Plea Agreement,  Civil Settlement  Agreement and related  documents thereby
     concluding  a global  disposition  of  these  previously  reported  pending
     litigations and matters. See also Part II, Item 1 of this Form 10Q.

     Reference is also made to Notes 9 and 10 of the Company's  Annual Report on
     Form 10K for the year ended April 30, 1998 for  information  regarding  the
     litigation settlement and other legal proceedings.




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                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Item 2

Management's Discussion and Analysis of Financial Condition and Results of 
Operations

RESULTS OF OPERATIONS

The table below sets forth the percentage of consolidated net sales  represented
by certain items in the Company's consolidated  statements of operations for the
respective six- and three-month periods of fiscal years 1999 and 1998:

<TABLE>
<CAPTION>
                                              Six months         Three months
                                                  Periods ended October 31,
<S>                                      <C>        <C>       <C>        <C> 
                                          1998       1997      1998       1997
                                          ----       ----      ----       ----
Net Sales
   Commercial ........................    84.2%      84.4%     86.1%      84.5%
   US Government .....................    15.8       15.6      13.9       15.5
                                         -----      -----     -----      -----
                                         100.0      100.0     100.0      100.0

Cost of Sales ........................    66.5       64.6      67.2       63.4
Insurance reimbursement ..............   (34.1)       --      (72.8)        --
Selling and administrative expenses: .    17.6       18.5      18.2       18.6
Research and development expenses ....    14.9        4.0      19.0        3.9
                                         -----      -----     -----      -----
   Operating profit ..................    35.1       12.9      68.4       14.1

Other income (expense)- net ..........     6.8        8.1       6.2        7.9
                                         -----      -----     -----      -----
Pretax Income ........................    41.9       21.0      74.6       22.0
Provision for income taxes ...........    13.6        1.2      22.7        1.6
                                         -----      -----     -----      -----
   Net earnings ......................    28.3%      19.8%     51.9%      20.4%
                                         =====      =====     =====      =====
</TABLE>


For the six- and three-month  periods ended October 31, 1998,  operating  profit
increased by $2.7 million (134%) and $3.1 million (274%), respectively, over the
comparable  periods of fiscal year 1998 while net earnings increased by $696,000
(23%) and $1.6 million (97%), respectively. These positive outcomes were largely
the result of the  reimbursement  of $4.5 million of prior year litigation costs
under the Company's  Directors' and Officers' liability insurance policies.  The
gain from this  transaction was offset by lower revenues and higher research and
development  costs as the  Company  continues  to  redirect  internal  resources
towards the development of a generic line of satellite  transponder products. In
addition, the Company will fully utilize its tax net operating loss carryforward
during fiscal 1999, consequently  recognizing a larger current tax obligation as
well as  recognizing  deferred  income  taxes as  compared  to the  fiscal  1998
periods.

Net sales  declined  $2.1 million  (14%) and $1.8 million  (23%),  respectively,
during the six- and  three-month  periods  ended October 31, 1998 as compared to
the same periods of fiscal 1998. Sales of commercial  products during these six-
and three-month  periods decreased by $1.8 million (14%) and $1.5 million (22%),
respectively,  from fiscal 1998 levels. These results reflect the Company's plan
to apply internal resources toward development of additional products to fulfill
expected  future  demand for  commercial  space  hardware.  Continued  delays in
certain world-wide  satellite  manufacturing  programs are providing a window of
opportunity  for the Company to complete  its  development  program  during this
fiscal year.

Gross  margin  rates were 33% for both the six- and  three-month  periods  ended
October  31,  1998 as  compared  to 35% and 37% for the  comparable  fiscal 1998
periods. Gross margins on US government sales were 20% and 19% for  the six- and

                                    10 of 15


<PAGE>


                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES
                                   (Continued)

three-month  periods ended October 31, 1998,  respectively,  compared to 19% and
24%  for the  comparable  periods  of  fiscal  1998.  Margins  on the  Company's
commercial  revenues were 36% and 35% for the six- and three-month periods ended
October  31,  1998 as  compared  to 38% for each of the  comparable  fiscal 1998
periods.  With the present mix of  commercial  versus  government  projects  and
recent contract bookings, the Company expects to realize improved profit margins
for the remainder of fiscal 1999.

Selling and administrative  costs decreased by $511,000 (18%) and $362,000 (24%)
for the six- and  three-month  periods  ended  October 31,  1998,  over the same
periods of fiscal 1998. This decrease is  attributable  to reduced  accruals for
bonuses and the decline in legal  expenses  related to the Company's  litigation
with the U.S.  government  which was settled in June 1998.  All costs related to
the settlement were accrued as of April 30, 1998. The Company  anticipates  that
selling  and  administrative  expenses  will  increase in the latter half of the
current  fiscal year as the Company  intensifies  its marketing  efforts for its
commercial space hardware products.

Research  and  development  costs  in  the  fiscal  1999  periods  increased  by
$1,358,000  (223%) and $856,000 (272%),  respectively,  over the comparable six-
and  three-month  periods ended October 31, 1997. As indicated  previously,  the
Company  intends to devote  significant  resources  to develop a line of generic
products  to be  used  as the  building  blocks  for  the  commercial  satellite
transponder market. In prior years, the Company secured partial customer funding
for its development  efforts. For the satellite  transponder  development effort
and other  development  projects during fiscal 1999, the Company is targeting to
spend up to $6 million of its own funds in order to begin bringing such products
to the  market by the fourth  quarter of the  current  fiscal  year.  Internally
generated  cash and cash  reserves  will be  adequate  to fund this  development
effort.

Net  nonoperating  income and expense  decreased by $336,000  (27%) and $251,000
(40%) in the six- and  three-month  periods  ended  October  31,  1998  from the
comparable fiscal 1998 periods. Investment income increased by $192,000 (21%) in
the fiscal 1999 six month period but decreased by $16,000 (3%) during the fiscal
1999 second quarter over the comparable fiscal 1998 periods.  This is the result
of a 34% increase in income-earning  assets from October 31, 1997 to October 31,
1998 which was offset by lower  interest  rates,  some of which was initiated by
the  Company  through a  substantial  investment  in tax-free  municipal  bonds.
Interest expense decreased by $285,000 and $141,000 (62% each) during the fiscal
1999 six- and three-month periods compared to the same periods ended October 31,
1997.  This decrease is the result of the repayment  during the third quarter of
fiscal 1998 of over $10  million of debt  related to the  Company's  former real
estate holdings.  Other income (expense),  net, decreased by $813,000 (102%) and
$376,000  (94%)  during the fiscal  1999  periods as compared to the fiscal 1998
six-  and  three-month   periods.   In  fiscal  1998,  this  category  consisted
principally of rental income under a long-term lease.  Since this lease was part
of the real estate sales  effected in January  1998,  no further  income will be
derived  from that source.  For the balance of fiscal 1999,  the values in Other
income (expense), net, are expected to be nominal.

Prior to fiscal  1999,  income  taxes  consisted  principally  of state taxes on
capital and alternative minimum tax as a result of substantial tax net operating
loss  carryforwards.  Consequently,  the  effective  tax rate in prior years was
nominal.  The effective tax rate for fiscal 1999 is expected to be approximately
30%. This rate is lower than was initially  anticipated  at the beginning of the
fiscal year due to three  factors- the investment in tax-free  municipal  bonds,
the reduced  amortization costs of the Employee Stock Ownership Plan as a result
of the lower market value of the  Company's  common stock and the tax credit for
incremental  research and  development  expenses,  the  provisions of which were
recently reinstated by Congress.




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<PAGE>


                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES
                                   (Continued)

LIQUIDITY AND CAPITAL RESOURCES

The  Company's  balance  sheet  continues  to reflect a strong  working  capital
position of $66 million at October 31, 1998 compared to working capital at April
30, 1998, of $63 million. Included in working capital at October 31, 1998 is $36
million of cash,  cash  equivalents  and  marketable  securities,  including $12
million of REIT units which are convertible to Reckson  Associates  Realty Corp.
common stock after January 6, 1999.

Net cash used in operating activities for the six months ended October 31, 1998,
was $7.2 million compared to a net cash inflow of $2.5 million in the comparable
fiscal 1998 period.  The fiscal 1999 net outflow is the result of the $8 million
litigation  settlement  coupled with larger research and  development  spending.
Without those two items,  cash flows from operating  activities  would have been
positive.  The  Company  will  continue to expend its  resources  and efforts to
develop  hardware  for  commercial  satellite  programs  and  commercial  ground
communication  and navigation  systems which management  believes will result in
future growth and continued  profitability.  Internally  generated cash and cash
reserves will be adequate to fund  development  efforts in these  markets.  As a
result of this investment in its future during the remainder of fiscal 1999, the
Company  does not  anticipate  that it will  generate  positive  cash  flow from
operating activities this fiscal year.

Net cash provided by investing  activities  for the six months ended October 31,
1998,  was $1.7 million.  This amount was generated  through the sale of certain
U.S.  government  and  agency  securities  aggregating  $2.3  million  which was
partially  offset by the  acquisition  of capital  equipment  for  approximately
$610,000. The Company may continue to acquire or redeem marketable securities as
dictated by its investment  strategies as well as by the cash  requirements  for
its  development  activities.  The Company may spend up to $2 million on capital
equipment  related to the  development  and  manufacture  of new  products.  The
Company has sufficient resources to acquire such capital equipment.

Net cash used in financing activities for the six months ended October 31, 1998,
was $1.4  million  compared to $88,000 for the  comparable  fiscal 1998  period.
Included  in the  fiscal  1999  amount is payment  of the  Company's  semiannual
dividend in the aggregate  amount of $771,000,  the acquisition of 50,000 shares
of Company  stock for treasury at a cost of $349,000  and $330,000  used to make
regularly scheduled long-term liability payments.  These outflows were partially
offset by  transactions  related to the  Company's  common  stock and  involving
certain   officers  and  other  employees  who  exercised  stock  option  rights
($72,000).

Year 2000 Issue

During the second half of fiscal 1999,  the Company  intends to install the next
upgrade  of  its  current  financial  software  or to  acquire  new,  integrated
financial  and  manufacturing  software,  the cost of which is not  expected  to
exceed  $500,000.  The  upgrade  or  purchase  of new  financial  software  will
satisfactorily  address the issue of  compliance  with the year 2000 problem for
financial  transactions  and reporting  purposes.  The upgraded or new financial
software is expected to be fully  functional by the summer of 1999.  The Company
has sufficient resources to acquire, install and implement such software.

Beginning in the latter portion of fiscal 1998 and concluding  during the second
quarter of fiscal 1999, the Company acquired new desktop computers of sufficient
size and speed to operate the  anticipated new financial  software.  The cost of
these computers,  included in capital equipment, was approximately $220,000. The
Company has determined that additional  operational,  nonfinancial software must
be  obtained to resolve  the year 2000 issue in certain  production  and support
areas, the cost of which will not exceed $50,000.



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<PAGE>


                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES
                                   (Continued)

Year 2000 Issue (continued)

The Company's  products do not contain  imbedded  microchips or other components
which are date  sensitive.  The same is generally true of the products which are
acquired from  third-party  vendors.  Consequently,  the Company's  products are
already  compliant  with the year 2000.  In  addition,  the Company has received
assurances  from its  "critical"  vendors that their  systems are or will be Y2K
compliant prior to the year 2000. Consequently,  the Company does not anticipate
any interruption in services or supplies from vendors.

The Company's  "worst case"  scenario is that its  financial  and  manufacturing
software is not timely  installed  which  prevents  the Company  from  preparing
appropriately dated invoices,  payments or other  documentation.  In that event,
the Company will employ  alternative  strategies,  principally hiring additional
clerical  personnel,  to assure that its records and  documentation are properly
and accurately  maintained until such time that the software  implementation can
be completed.

Backlog

At October 31, 1998, the Company's backlog amounted to approximately $23 million
compared to the  approximately  $22 million  backlog at April 30, 1998.  Of this
backlog, approximately 50% is realizable in the next twelve months.



"Safe Harbor"  Statement under the Private  Securities  Litigation Reform Act of
1995:

The statements  contained in this release which are  forward-looking  statements
and not based on historical facts, are subject to risks and  uncertainties  that
could cause actual  results to differ  materially  from those set forth  herein.
Such risks include changes in contractual agreements or a change in status under
the US government-imposed  suspension and other risks as more fully described in
the Company's  Annual Report on Form 10K filed with the  Securities and Exchange
Commission.























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<PAGE>


                  FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES
                                   (Continued)

                                     PART II


     ITEM 1 - Legal Proceedings

         On June 19, 1998, Frequency  Electronics,  Inc. ("FEI" or "Registrant")
     and the U.S.  Government  entered into a Plea Agreement,  Civil  Settlement
     Agreement and related documents ("Settlement Agreement") thereby concluding
     a global disposition of certain previously reported pending litigations and
     matters.  All  criminal  charges  brought  by the U.S.  Government  against
     certain  officers,  employees and former  employees of FEI were  dismissed,
     with prejudice. The criminal charges brought by the U.S. Government against
     FEI were dismissed,  with prejudice,  with the exception of a single charge
     of  submitting  a  false  statement  which  failed  to  disclose  the  full
     explanation of FEI's costs on a highly classified government project, as to
     which FEI pled guilty and paid the U.S.  Government  a fine of $400,000 and
     $1.1  million as  reimbursement  for costs of its  investigation,  with all
     known criminal  investigations of FEI having been resolved.  As part of the
     Settlement Agreement, the Fox Civil Case was dismissed,  with prejudice, as
     to all defendants and FEI paid the U.S.  Government  $1.5 million to settle
     this case; and the Geldart qui tam action was dismissed, with prejudice, as
     to all  defendants  and FEI paid the U.S.  Government  $5 million to settle
     this case.

         The  Settlement  Agreement  does not affect other  previously  reported
     pending  litigations and matters  including a second qui tam action and two
     separate  derivative  shareholder  actions which seek recovery on behalf of
     the  Company  for any  losses it incurs as a result of the U.S.  Government
     indictments.

         On July 9, 1998,  FEI was  notified by the U.S.  Department  of the Air
     Force of FEI's proposed  debarment  based upon FEI's guilty plea entered in
     connection  with the global  disposition and the Settlement  Agreement.  On
     October 21, 1998,  the U.S.  Department of the Air Force  notified FEI that
     its debarment will be terminated on December 12, 1998, without condition.

         On  October  21,  1998,  FEI  settled  its  claim  with the  Associated
     International  Insurance Company  ("Associated") under applicable directors
     and officers  coverage and, on November 17, 1998,  FEI received  payment in
     the amount of $4.5 million.

         For  all  items  noted  above,  reference  is  made  to  Item 3 - Legal
     Proceedings  of  Registrant's  Annual Report on Form 10K for the year ended
     April 30, 1998 on file with the Securities and Exchange Commission.

     ITEM 6 - Exhibits and Reports on Form 8-K

         (a) Exhibits - None

         (b) On October 23, 1998, the Company's  report on Form 8-K,  containing
     disclosure under Item 5 thereof (termination of debarment),  was filed with
     the Securities and Exchange Commission.











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<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.


                                        FREQUENCY ELECTRONICS, INC.
                                                 (Registrant)

Date:  December 14, 1998                BY  /s/ Joseph P. Franklin
                                            ----------------------
                                                Joseph P. Franklin
                                                Chief Executive Officer



Date: December 14, 1998                 BY  /s/ Alan Miller
                                            ---------------
                                                Alan Miller
                                                Chief Financial Officer
                                                and Treasurer




































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