<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION


                              Washington, DC 20549


                                    FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 or 15 (d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended June 30, 1997                 Commission File No. 1-6736

                              STARRETT CORPORATION

             (Exact Name of Registrant as specified in its charter)

NEW YORK                                                            13-5411123
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                             Identification No.)

909 THIRD AVENUE, NEW YORK, NEW YORK                                     10022
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code               (212)751-3100

                                      NONE

         (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the close of the period covered by this report.

                        6,566,402 shares of common stock.
<PAGE>   2
                      STARRETT CORPORATION AND SUBSIDIARIES


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                           <C>
Consolidated Financial Statements:

Statement of Consolidated Financial Position - June 30, 1997......................................................3

Statement of Consolidated Financial Position -
 December 31, 1996................................................................................................4

Statements of Consolidated Operations - For the Six Months
 ended June 30, 1997 and 1996.....................................................................................5

Statements of Consolidated Operations - For the Three Months
 ended June 30, 1997 and 1996.....................................................................................6

Statements of Consolidated Stockholders' Equity - June 30, 1997
 and December 31, 1996............................................................................................7

Statements of Consolidated Cash Flows - For the Six Months
 ended June 30, 1997 and 1996.....................................................................................8

Notes to Consolidated Financial Statements........................................................................9

Management's Discussion of Financial Condition and
 Results of Operations...........................................................................................10

Signatures.......................................................................................................13

Exhibit A -       Computation of Primary Earnings per Share - For the
                  Six Months ended June 30, 1997 and 1996........................................................14

Exhibit B -       Computation of Primary Earnings per Share - For the
                  Three Months ended June 30, 1997 and 1996......................................................15
</TABLE>

                                        2
<PAGE>   3
                      STARRETT CORPORATION AND SUBSIDIARIES
                  STATEMENT OF CONSOLIDATED FINANCIAL POSITION
                                  JUNE 30, 1997
                                 (In Thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                                                  <C>
ASSETS:
Cash and Cash Equivalents ..............................................................             $   5,277
Cash Restricted ........................................................................                 4,914
Receivables ............................................................................                49,483
Inventory of Real Estate ...............................................................               102,810
Investments in Joint Ventures...........................................................                 4,922

Property and Equipment-Net .............................................................                 3,677
Other Assets ...........................................................................                20,180
                                                                                                      --------

         Total..........................................................................              $191,263
                                                                                                      ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Payable Within One Year:
 Accounts payable ......................................................................             $  41,654
 Current portion of long-term obligations ..............................................                 9,653
 Accrued liabilities  ..................................................................                11,956
                                                                                                      --------
         Total Liabilities Payable Within One Year......................................                63,263

Deferred Income taxes ..................................................................                 8,803
Other Liabilities ......................................................................                 1,311
Long-Term Obligations ..................................................................                60,526
                                                                                                      --------

         Total..........................................................................               133,903
                                                                                                       -------

Commitments and Contingencies


Minority Interest.......................................................................                 2,088
                                                                                                      --------

Stockholders' Equity
 Common stock-par value, $1.00; authorized,
  18,000 shares.........................................................................                 6,566
 Capital in excess of par value.........................................................                23,933
 Retained earnings......................................................................                27,690
 Pension liability adjustment...........................................................                (1,327)
 Shares held in treasury-at cost........................................................                (1,590)
                                                                                                       --------

Stockholders' Equity....................................................................                55,272
                                                                                                        ------

         Total .........................................................................              $191,263
                                                                                                      ========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        3
<PAGE>   4
                      STARRETT CORPORATION AND SUBSIDIARIES
                  STATEMENT OF CONSOLIDATED FINANCIAL POSITION
                                DECEMBER 31, 1996
                                 (In Thousands)

<TABLE>
<CAPTION>
<S>                                                                                   <C>
ASSETS:
Cash and Cash Equivalents ........................................................     $  8,662
Cash Restricted...................................................................        4,487
Receivables       ................................................................       37,642
Inventory of Real Estate..........................................................       91,034
Investments in Joint Ventures.....................................................        6,155
Property and Equipment-Net........................................................        3,925
Other Assets      ................................................................       15,067
                                                                                       --------

     Total........................................................................     $166,972
                                                                                       ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Payable Within One Year:
  Accounts payable................................................................     $ 22,716
  Current portion of long-term obligations .......................................        9,126
  Accrued liabilities.............................................................       14,565
                                                                                       --------
     Total Liabilities Payable Within One Year....................................       46,407

Deferred Income Taxes ............................................................        8,942
Other Liabilities  ...............................................................        1,311
Long-Term Obligations ............................................................       53,030
                                                                                       --------

     Total........................................................................      109,690
                                                                                       --------

Commitments and Contingencies
Minority Interest.................................................................        2,088

Stockholders' Equity:
  Common stock-par value, $1.00; authorized,
   18,000 shares..................................................................        6,566
  Capital in excess of par value..................................................       23,933
  Retained earnings...............................................................       27,612
  Pension liability adjustment....................................................       (1,327)
  Shares held in treasury-at cost.................................................       (1,590)
                                                                                       ---------

Stockholders' Equity..............................................................       55,194
                                                                                       --------

     Total........................................................................     $166,972
                                                                                       ========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        4
<PAGE>   5
                      STARRETT CORPORATION AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED OPERATIONS
                 For The Six Months Ended June 30, 1997 and 1996
                      (In Thousands Except Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                          1997             1996
                                                                                        -------           -------
<S>                                                                                     <C>               <C>
Revenues .........................................................................      $93,894           $71,281
Equity in Earnings of Joint Ventures..............................................          611             1,615
                                                                                        -------           -------

     Total Revenues...............................................................       94,505            72,896

Construction Costs................................................................       64,300            40,768
                                                                                        -------           -------

Income from Construction Contracts and
 Related Revenues.................................................................       30,205            32,128
                                                                                        -------           -------

Expenses:
 General and Administrative.......................................................       19,161            15,753
 Security Service Labor and Other Costs...........................................        4,282             5,611
 Selling..........................................................................        2,448             2,850
 Mortgage and Closing Costs.......................................................        2,505             3,208
 Interest.........................................................................          259               176
                                                                                        -------           -------

     Total........................................................................       28,655            27,598
                                                                                        -------           -------

Income before Income Taxes........................................................        1,550             4,530
Income Taxes .....................................................................          687             1,996
                                                                                        -------           -------

Net Income........................................................................      $   863           $ 2,534
                                                                                      =========         =========


Earnings per Common Share.........................................................         $.14              $.40
                                                                                      =========         =========

Weighted Average Number of Shares.................................................        6,261             6,261
                                                                                      =========         =========

Cash Dividends per Share..........................................................        $.125             $.125
                                                                                      =========         =========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        5
<PAGE>   6
                      STARRETT CORPORATION AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED OPERATIONS
                For The Three Months Ended June 30, 1997 and 1996
                      (In Thousands Except Per Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          1997             1996
                                                                                        -------           -------
<S>                                                                                    <C>               <C>
Revenues .........................................................................      $56,250           $36,691
Equity in Earnings of Joint Ventures..............................................          304               697
                                                                                        -------           -------

     Total Revenues...............................................................       56,554            37,388

Construction Costs................................................................       40,478            21,097
                                                                                        -------           -------

Income from Construction Contracts and
 Related Revenues.................................................................       16,076            16,291
                                                                                        -------           -------

Expenses:
 General and Administrative.......................................................        9,848             7,825
 Security Service Labor and Other Costs...........................................        2,211             3,015
 Selling..........................................................................        1,448             1,256
 Mortgage and Closing Costs.......................................................        1,248             1,611
 Interest.........................................................................          136               104
                                                                                        -------           -------

     Total........................................................................       14,891            13,811
                                                                                        -------           -------

Income before Income Taxes........................................................        1,185             2,480
Income Taxes .....................................................................          525             1,114
                                                                                        -------           -------

Net Income........................................................................      $   660           $ 1,366
                                                                                        =======           =======
Earnings per Common Share.........................................................         $.11              $.22
                                                                                        =======           =======

Weighted Average Number of Shares.................................................        6,261             6,261
                                                                                        =======           =======

Cash Dividends per Share..........................................................       $.0625            $.0625
                                                                                        =======           =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        6
<PAGE>   7
                      STARRETT CORPORATION AND SUBSIDIARIES
                 STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
                        (In Thousands Except Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          June 30,   December 31,
                                                                                           1997         1996
                                                                                           ----         ----
<S>                                                                                      <C>        <C>
Common Stock - Par Value, $1.00; Authorized,
 18,000,000 shares; Issued, 6,566,402 shares........................................      $ 6,566      $ 6,566

Capital in Excess of Par Value......................................................       23,933       23,933

Retained Earnings ..................................................................       27,690       27,612

Pension Liability Adjustment........................................................       (1,327)      (1,327)

Less:    Shares Held in Treasury - at cost;
         1997 and 1996, 305,442 shares..............................................       (1,590)      (1,590)
                                                                                          -------      -------

TOTAL COMMON STOCKHOLDERS' EQUITY...................................................      $55,272      $55,194
                                                                                          =======      =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        7
<PAGE>   8



                      STARRETT CORPORATION AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED CASH FLOWS
                 For The Six Months Ended June 30, 1997 and 1996
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           1997          1996
                                                                                           ----          ----

<S>                                                                                      <C>          <C>
OPERATING ACTIVITIES:
Net income..........................................................................     $    863     $  2,534
Adjustments to reconcile net income to net cash used in
 operating activities:
  Depreciation and amortization.....................................................        1,265        1,323
  Deferred income taxes.............................................................         (139)         702
  Equity in earnings in joint ventures..............................................         (611)      (1,615)

  Changes in operating assets and liabilities:
   Cash Restricted..................................................................         (427)
   Receivables......................................................................      (11,841)      (6,529)
   Inventories......................................................................      (11,776)     (26,967)
   Accounts payable.................................................................       18,938       11,707
   Other assets.....................................................................       (5,772)      (4,182)
   Accrued liabilities..............................................................       (2,609)      (1,703)
                                                                                         --------      -------

Net cash used in operating activities...............................................      (12,109)     (24,730)
                                                                                         --------      -------

INVESTING ACTIVITIES:
Investment in joint ventures........................................................                    (1,015)
Proceeds from joint ventures........................................................        1,844        4,658
Investments in and advances to partnerships.........................................            4           80
Purchase of property and equipment..................................................         (362)      (1,022)
                                                                                         --------      -------

Net cash provided by (used in) investing activities.................................        1,486        2,701
                                                                                         --------      -------

FINANCING ACTIVITIES:
Repayment of long term obligations..................................................      (14,670)     (23,692)
Proceeds from long term obligations.................................................       22,693       37,240
Proceeds from minority interest.....................................................                     1,885
Payment of cash dividends to common
 stockholders.......................................................................         (785)        (391)
                                                                                         --------      -------

Net cash provided by financing activities...........................................        7,238       15,042
                                                                                         --------      -------

Decrease in cash and cash equivalents...............................................       (3,385)      (6,987)

Cash and cash equivalents beginning of period.......................................        8,662       10,762
                                                                                         --------      -------

Cash and cash equivalents end of period.............................................     $  5,277     $  3,775
                                                                                         ========      =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        8
<PAGE>   9
                      STARRETT CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The accompanying consolidated financial statements of Starrett
Corporation and its subsidiaries have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of the
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The consolidated financial
statements as of and for the six months ended June 30, 1997 and 1996 are
unaudited and are subject to year-end audit and adjustments. The results of
operations for the interim periods are not necessarily indicative of the results
of operations for the fiscal year. For comparability purposes, certain 1996
amounts have been reclassified to conform with the 1997 classifications. For
further information, refer to the consolidated financial statements and
footnotes included thereto in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.

                                        9
<PAGE>   10
          MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS
         COMPARISON OF SIX AND THREE MONTHS ENDED JUNE 30, 1997 AND 1996

         During the six and three months ended June 30, 1997, the Company had
income before income taxes of $1,550,000 and $1,185,000 as compared with
$4,530,000 and $2,480,000 in 1996, and net income of $863,000 or $.14 a share
and $660,000 or $.11 a share as compared to $2,534,000 or $.40 a share and
$1,366,000 or $.22 a share for the similar periods in 1996.

     The decrease in income was attributable to Levitt, the Company's single
family home building subsidiary and Grenadier, the Company's management
subsidiary.

     Levitt's revenues decreased $4,904,000 for the six months ended June 30,
1997 as compared to the similar period in 1996, offset by a $30,306,000 increase
in revenues from HRH, the Company's construction subsidiary, on construction
performed as a general contractor. HRH had an increase in revenues for the three
months ended June 30, 1997 in the amount of $19,829,000. HRH the Company's
construction manager has increased the volume of its work it performs as a
general contractor as opposed to its construction management activities and in
accordance with accounting guidelines, must reflect construction volume on a
gross basis in the Statement of Operations. Because gross revenues from general
contractor work include subcontractor costs incurred by the Company, which are
also included in construction costs, the increase in gross revenues does not
increase the operating income of the Company.

         House sales decreased during the six months ended June 30, 1997 as
compared to 1996, due to lower deliveries in both Levitt's Puerto Rico and
Florida regions. The decrease in deliveries in Puerto Rico was caused by
construction delays resulting from excessive rains during the fourth quarter of
1996 and the first quarter of 1997. The decrease in deliveries in Florida was
due to the timing of communities nearing completion and the introduction of new
projects and product lines. Levitt expects increased revenues as homes in the
new projects are completed during the third and fourth quarter of 1997.

         House sales increased $1,329,000 during the three months ended June 30,
1997, as compared to 1996, due to homes delivered in the Company's Puerto Rico
region having a significantly higher average sale price. The increase in average
sale price was due to the change in product mix.

         Levitt's equity in earnings of joint ventures decreased $1,004,000 and
$393,000 for the six and three months ended June 30, 1997 as compared to the
same period in 1996, primarily due to a decrease in home deliveries in the joint
venture communities which are nearing completion.

         Levitt's backlog of homes contracted for sale at June 30, 1997 was
$127,014,000 compared to $109,313,000 at June 30, 1996. Included in Levitt's
sales backlog at June 30, 

                                       10
<PAGE>   11
1997 and 1996 is $55,739,000 and $35,827,000, respectively, which constitutes
the full backlog from joint ventures in which Levitt has interests ranging from
50% to 75%.


         Grenadier reported a decrease in operating income which commenced in
the fourth quarter of 1996 and continues into 1997, due to the assumption by
Grenadier of certain administrative expenses previously reimbursed under a
management contract and the loss of a major security service contract in one of
its subsidiaries.

         General and administrative expenses increased $3,408,000 and $2,023,000
for the six and three months ended June 30, 1997 principally due to the
expansion of HRH into the interiors construction business, but also to the
expansion of operations in other segments of the Company's business.

         Security service labor and other costs decreased $1,329,000 and
$804,000 for the six and three months ended June 30, 1997 as a result of the
loss of a major security contract and the reduction of security forces.

         Selling, mortgage and closing costs decreased $1,105,000 and $171,000
for the six and three months ended June 30, 1997 resulting from the decrease in
house sales in Levitt Corporation.

         Interest expense increased $83,000 and $32,000 for the six and three
months ended June 30, 1997 resulting from additional borrowings by Starrett for
various development and working capital requirements.

Financial Condition and Capital Resources

         The Company meets its short-term financing needs with cash generated
from operations and funds available under several unsecured credit agreements.
On January 31, 1996, Levitt satisfied a $14,400,000 unsecured credit facility
through a $4,400,000 payment from working capital and a $10,000,000 payment from
an unsecured term loan. The new loan requires semi-annual principal payments of
$1,000,000 and $1,500,000 in July and January, respectively, through January
2000.

         Homebuilding Operations

         The Company generally meets its land acquisition, development and
construction needs through mortgage loans and unsecured revolving credit
facilities. During March 1996, the Company renewed and extended its $15,000,000
revolving unsecured credit agreement used to finance its Puerto Rico
homebuilding operation for an additional three years. In June 1997, the
$15,000,000 credit agreement was modified to increase the line of credit to
$24,000,000 with the additional $8,000,000 being secured with land mortgages in
Puerto Rico.

                                       11
<PAGE>   12
         Mortgage Operations

         During 1995 the Company entered into a credit agreement with a Puerto
Rico bank to provide an unsecured revolving line of credit of $3,000,000 to
finance the working capital needs of the expanding Puerto Rico mortgage banking
operation.

         Development/Construction Management

         During 1995 the Company entered into a credit agreement with a New York
bank to provide a $3,000,000 unsecured line of credit to finance development,
construction and other operating activities. In March 1997 the credit agreement
was further modified to increase the line of credit to $8,000,000.

         1997 Cash Flows

         Net cash used in operating activities of $12,109,000 comprised an
increase in inventories of $11,776,000, an increase in receivables of
$11,841,000 and a net change in other operating assets and liabilities of
$8,808,000, offset by net income of $863,000, an increase in accounts payable of
$18,938,000 and net adjustments for non-cash items of $515,000.

         The increase in inventories is due primarily to Levitt's continued
investment in two new development projects in the Florida region. The increase
in receivables and accounts payable reflects the increase in construction volume
on projects where the Company acts as a general contractor.

         Net cash provided by investing activities of $1,486,000 comprised net
proceeds from joint ventures of $1,844,000 offset by other net investing
activities of $358,000.

         Net cash provided by financing activities of $7,238,000 comprised net
proceeds from notes and mortgages payable of $8,023,000, offset by payments of
cash dividends to common stockholders of $785,000.

         Seasonality

         The timing of introducing Levitt's new projects to the market, weather
conditions in certain of Levitt's regions, and traditional periods of greater
customer activity have tended to create seasonal trends in Levitt's residential
home building activities. Historically, the number of homes delivered has been
greater in the second half of the calendar year.

         Except as discussed above, management is not aware of any trends or
events, commitments or uncertainties that will impact liquidity in a material
way.

                                       12
<PAGE>   13
                                   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.




                                       STARRETT CORPORATION
                                       (Registrant)





                                       s/ Paul Milstein
                                       ----------------------------------------
                                       Paul Milstein - Chairman





                                       s/ Lewis A. Weinfeld
                                       ----------------------------------------
                                       Lewis A. Weinfeld - Executive Vice
                                       President and Chief Financial Officer
                                       (Principal Accounting Officer)


DATE:  August 13, 1997

                                       13
<PAGE>   14
                                                                       EXHIBIT A
                      STARRETT CORPORATION AND SUBSIDIARIES
                EXHIBIT SETTING FORTH THE COMPUTATION OF PRIMARY
                         EARNINGS PER SHARE INFORMATION
                     (In Thousands Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                                                            SIX MONTHS ENDED
                                                                                                JUNE 30,
                                                                                            1997         1996
                                                                                            ----         ----
<S>                                                                                        <C>          <C>
Weighted average number of shares outstanding during
 the period.........................................................................        6,261        6,261
                                                                                            =====        =====



Net Income..........................................................................         $863       $2,534
                                                                                             ====       ======



Primary earnings per share:


     Net Income.....................................................................         $.14         $.40
                                                                                             ====         ====
</TABLE>

                                       14
<PAGE>   15
                                                                       EXHIBIT B
                      STARRETT CORPORATION AND SUBSIDIARIES
                EXHIBIT SETTING FORTH THE COMPUTATION OF PRIMARY
                         EARNINGS PER SHARE INFORMATION
                     (In Thousands Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                                                          THREE MONTHS ENDED
                                                                                                JUNE 30,
                                                                                            1997        1996
                                                                                            ----        ----
<S>                                                                                       <C>           <C>
Weighted average number of shares outstanding during
 the period.........................................................................        6,261        6,261
                                                                                            =====        =====




Net Income..........................................................................         $660       $1,366
                                                                                             ====       ======



Primary earnings per share:


     Net Income.....................................................................         $.11         $.22
                                                                                             ====         ====
</TABLE>

                                       15