SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10Q


                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

         For the quarter ended June 28, 1997 Commission File No.: 1-5522

                        STERLING ELECTRONICS CORPORATION
             (Exact name of registrant as specified in its charter)


           NEVADA                                           74-1261194
--------------------------------------------------------------------------------
State or other jurisdiction of                   IRS Employer Identification No.
incorporation or organization


4201 Southwest Freeway, Houston, Texas                       77027
--------------------------------------------------------------------------------
(Address of principal executive office)                    Zip Code)

           Registrant's area code and telephone number: (713) 627-9800

Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  act of 1934  during  the
preceding  twelve  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 by this report.


           Class                                   Outstanding at August 7, 1997
----------------------------                       -----------------------------
Common Stock, $.50 par value                                7,167,109

<PAGE>
                                      INDEX
                        STERLING ELECTRONICS CORPORATION



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Condensed consolidated statements of financial position June 28, 1997
         and March 29, 1997

         Condensed  consolidated  statements of income - thirteen weeks ended
         June 28, 1997 and June 29, 1996

         Condensed consolidated statements of cash flows - thirteen weeks ended
         June 28, 1997  and June 29, 1996


         Notes to condensed consolidated financial statements - June 28, 1997


Item 2.  Management's Discussion and Analysis of the Results of Operations

<PAGE>


                        STERLING ELECTRONICS CORPORATION
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                            June 28,                June 30,
                                             1997                    1996
                                      ------------------      ------------------

ASSETS

Current Assets
  Cash                                $   1,211,530           $    4,677,968
  Receivables-net of reserve
   for doubtful accounts                 50,607,690               42,018,187
  Inventory                              73,542,756               53,836,467
  Other current assets                    1,544,293                  826,270
                                      ------------------      ------------------
                                        126,906,269              101,358,892
Property and equipment - net of
 depreciation                             9,900,711                7,285,214
Goodwill, net of amortization             9,115,911                4,111,048
Other assets                              4,306,279                4,425,824
                                      ------------------      ------------------
                                      $ 150,229,170           $  117,180,978
                                      ==================      ==================


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
 Trade accounts payable and
  accrued expenses                    $   37,098,370          $   36,245,928
 Current portion - long term
  obligations                                240,544                 277,600
 Income taxes                              1,582,091               1,906,117
                                      ------------------      ------------------
                                          38,921,005               38,429,645
Long-term obligations - net of
 amounts due within one year              47,150,810               23,455,263
Postemployment benefits and other
 non-current liabilities                   5,065,201                4,232,400

Shareholders' Equity
  Common stock, $.50 par value             3,677,207               3,519,784
  Additional paid-in capital              26,796,227              22,298,270
  Retained earnings                       31,460,859              27,374,575
                                      ------------------      ------------------
                                          61,934,293              53,192,629
  Less treasury stock, at cost             2,789,694               2,128,834
  Foreign currency translation
   adjustment
                                           (  52,445)                   (125)
                                      ------------------      ------------------
                                          59,092,154              51,063,670
                                      ------------------      ------------------
                                      $  150,229,170           $ 117,180,978
                                      ==================      ==================
<PAGE>

                        STERLING ELECTRONICS CORPORATION
                        CONSOLIDATED STATEMENT OF INCOME
              THIRTEEN WEEKS ENDED JUNE 28, 1997 AND JUNE 29, 1996


                                             1997                    1996
                                       -----------------        ----------------


Net sales                              $  94,842,298             $82,122,830

Cost of sales                             75,332,231              63,965,326
Selling, administrative and
 other operating expenses                 16,383,976              13,640,695
                                       -----------------        ----------------
                                          91,716,207              77,606,021

Income from operations                     3,126,091               4,516,809
Interest expense                             684,210                 517,993
                                       -----------------        ----------------

Income before income taxes                 2,441,881               3,998,816

Income taxes                                 952,000               1,608,000
                                       -----------------        ----------------

Net income                             $   1,489,881            $  2,390,816
                                       =================        ================


Income per common share and common share equivalents:

     Primary                           $   0.21                 $   0.32
     Fully diluted                     $   0.21                 $   0.32


Number of common shares and common share
  equivalents used in computing per share amounts

     Primary                              7,215,664                7,400,492
     Fully diluted                        7,215,664                7,400,492

<PAGE>

                        STERLING ELECTRONICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              THIRTEEN WEEKS ENDED JUNE 28, 1997 AND JUNE 29, 1996




                                                 1997                 1996
                                           ----------------     ----------------

OPERATING ACTIVITIES
   Net income                               $     1,489,881     $ 2,390,815
   Adjustments  needed  to
    reconcile  net  income
    to net cash  provided
    by operating acitivities:
      Depreciation and amortization                 753,534         439,102
      Provision for losses on accounts
       receivable                                   302,205         331,477
   Changes in operating assets and
    liabilities
     Decrease in accounts receivable              4,812,163       7,733,378
     (Increase) decrease in inventories          (6,011,563)      2,922,916
     Decrease in prepaid and other
      current assets                                (72,088)       (899,651)
     Decrease in accounts payable and
      accrued expenses                          (10,987,029)     (1,090,575)
     Increase in postemployment benefits
      and other non-current liabilities              29,941          40,371
     Other adjustments for noncash
      items - net                                    49,940            -
                                           ----------------     ----------------
        Net cash (used) provided
         by operating activities                 (9,633,016)      11,867,833
INVESTING ACTIVITIES
   Purchase of property and equipment              (847,219)        (776,008)
   (Increase) decrease in other assets             (242,635)         207,158
                                           ----------------     ----------------
        Net cash (used) provided in
         investing activities                    (1,089,854)        (568,850)

FINANCING ACTIVITIES
   Proceeds from borrowings
    under revolver                               29,129,694        4,836,313
   Repayments of borrwoings
    under revolver                              (21,207,999)     (30,030,166)
                                           ----------------     ----------------
   Net increase (decrease) in
    revolving line of credit                      7,921,695      (25,193,853)
   Proceeds from long term borrowings                 -           15,000,000
   Principal payments on other
    long term debt                                  (70,068)         (82,968)
   Stock issued under employee plans                410,768          169,904
   Purchases of treasury stock                     (142,065)        (890,916)
                                           ----------------     ----------------
        Net cash provided (used)
         by financing activities                  8,120,330      (10,997,833)
   Effect of exchange rate changes on cash           (3,500)            -
                                           ----------------     ----------------
                                                  8,116,830      (10,997,833) 

(DECREASE) INCREASE IN CASH
  AND CASH EQUIVALENTS                           (2,606,040)          301,150
CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR                            3,817,570         4,376,818
                                           ----------------     ----------------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR                           $      1,211,530     $   4,677,968
                                           ================     ================
<PAGE>

                        STERLING ELECTRONICS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 28, 1997


Note A - Accounting Policies

The accompanying  unaudited condensed  consolidated financial statements include
the  accounts  of  Sterling  Electronics  Corporation  (the  "Company")  and its
majority-owned  subsidiaries  after elimination of all significant  intercompany
accounts  and  transactions.  In the  opinion  of  the  Company,  the  unaudited
condensed   consolidated   financial  statements  contain  all  the  adjustments
(consisting of only normal  accruals)  necessary to present fairly the financial
position  as of June 28,  1997 and the results of  operations  for the  thirteen
weeks then ended.  The results of operations  for the thirteen  weeks ended June
28, 1997 are not  necessarily  indicative  of the results to be expected for the
full year.


Note B - Long-term Debt

Long-term  debt as of June 28,  1997 and the  amounts due within one year are as
follows:


                             AMOUNTS DUE          LONG TERM     MATURING IN
DESCRIPTION                WITHIN ONE YEAR         PORTION      FISCAL YEAR

Revolving credit line       $         0          $ 31,921,695       1999

Senior note                           0            15,000,000       2007

Capitalized lease obligation     62,771                81,387       2000

Equipment loans                 177,773               147,728     1999-2001
                            -----------          ------------
                            $   240,544          $ 47,150,810

<PAGE>
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS

Thirteen weeks ended June 28, 1997
 compared to thirteen weeks ended June 29, 1996

Net Sales - Consolidated net sales for the current thirteen week period were 15%
ahead of sales for the  thirteen  week  period a year ago. If the sales of Marsh
Electronics,  Inc. ("Marsh"),  acquired in November,  1996, were excluded, sales
would have  increased  2.5%.  Such  increase  would be the  result of  increased
passive,  electromechanical and connector revenues partially offset by decreased
semiconductor revenues.

Gross Margin -  Sterling's  consolidated  gross  margin for the  thirteen  weeks
declined to 20.6% from 22.1% for the thirteen weeks a year ago. The gross margin
percentage  declined in all major product  categories as a result of competitive
pricing pressures.

Selling and Administrative Costs - Consolidated  operating expenses increased to
17.3% of sales compared to 16.6% of sales for the thirteen weeks a year ago. The
majority of the dollar  increase is due to the cost of operating  the four Marsh
sales  offices  and the Marsh  service  center  during the  current  period.  In
addition  to the four  Marsh  locations  the  Company  operated  two more  sales
locations  (Mission,  Texas and  Rochester,  New York) during the current period
than a year ago. Warehouse expenses, management information system costs and the
cost of the recently  established team of field application  engineers increased
significantly for the current thirteen week period compared to the thirteen week
period a year ago.

Interest Expense - The 32% increase in interest expense is the result of the $11
million  increase  from  the  comparable  period  in average indebtedness.

Liquidity  and Capital  Resources - Since the  beginning  of the current  fiscal
year,   Sterling  has  reduced   accounts   payable  and  accrued   expenses  by
approximately  $ 11.0  million.  In  connection  with this  reduction in current
liabilities, the Company increased its borrowings by approximately $7.9 million.
Additional  use of funds  has  been  capital  expenditures  of  approximately  $
800,000,  principally  for new computer  hardware and  software.  These  capital
expenditures were financed by cash flow from operations.

Working capital was $ 88.0 million at June 28, 1997 compared to $77.8 million at
March 39, 1997.  The current  ratio was 3.3 compared to 2.8 at the  beginning of
the year.  Working  capital  increased  as a result of increased  inventory  and
decreased  accounts payable and accrued expenses,  partially offset by decreased
receivables.  Average  annualized  inventory turnover for the current period was
4.3, the same as for fiscal 1997.

At June 28, 1997 the Company had $ 8 million in  available  credit under the $40
million bank credit line which matures on February 16, 1999. Management believes
that internal  generation  of cash flow (net income plus non-cash  items such as
depreciation and amortization),  available equipment financing,  funds available
under the bank credit line, plus possible increases in the bank credit line will
be sufficient to meet liquidity needs over the next year.

On June 5, 1996,  the Company  agreed to lease a 181,000  square foot  warehouse
which was  constructed  during  fiscal 1997  adjacent to the  Dallas/Fort  Worth
International  Airport. The lease term is ten years with monthly rental payments
of  approximately  $82,000,  plus the Company is  responsible  for all  property
taxes,  insurance  and  maintenance.  As of June 28, 1997,  the Company also has
leased material handling  equipment,  computer equipment and material management
software  for this  warehouse  and  distribution  center.  The lease term on the
equipment  lease is five years with  monthly  rental  payments of  approximately
$57,000,  plus the Company is responsible for all property taxes,  insurance and
maintenance.  As of June 28, 1997, the Company  intends to purchase and/or lease
$3 million to $4 million of  additional  equipment  and software  during  fiscal
1998. The Company  intends to  consolidate  the  distribution  operations of its
three  existing  regional  distribution  centers into this new  state-of-the-art
facility  during  the  second  and third  quarters  of fiscal  1998.  Management
believes that the capital  resources  described above should be adequate to fund
the cost of this consolidation and the operation of the new distribution center.

<PAGE>
                                OTHER INFORMATION

Item 1 through Item 5

The Company was not required to report on Items 1 through 5.

Item 6 - Exhibits and Reports on Form 8-K
(a) The following exhibit is included herein
    (11) Statement re: computation of earnings per share

(b) Reports of Form 8-K  -  There   were  no  reports  on
     Form 8-K filed during the thirteen weeks ended June 28,  1997







                                   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.


                                                STERLING ELECTRONICS CORPORATION


                                                /s/Mac McConnell
                                                --------------------------------
Date:  August 10, 1997                          Mac McConnell, Vice-President
                                                Chief Financial Officer

<PAGE>
                        STERLING ELECTRONICS CORPORATION
             (11) - Statement Re: COMPUTATION OF PER SHARE EARNINGS

                                                   Thirteen weeks ended
                                           -------------------------------------
                                             June 28, 1997       June 29, 1996

PRIMARY

Average shares outstanding                     7,094,480           7,231,908
Net effect of dilutive
 stock options- based on the
 treasury stock method using
 average market price                            121,184             168,584
                                           -----------------   -----------------
Total                                          7,215,664           7,400,492
                                           =================   =================


Net income applicable to common stock      $   1,489,881       $   2,390,816

Per share amount                           $        0.21       $        0.32




FULLY DILUTED

Average shares outstanding                 $   7,094,480       $   7,231,908
Net effect of dilutive stock options-
 based on the treasury stock method
 using average market price                      121,184             168,584
                                           -----------------   -----------------
Total                                          7,215,664           7,400,492
                                           =================   =================

Net income applicable to common stock      $   1,489,881       $   2,390,816

Per share amount                           $         .21       $         .32