United States

                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
             [ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the thirteen-week period ended:  September 25, 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 number: 0-10726

                             C-COR ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

              Pennsylvania                          24-0811591
   (State or other jurisdiction of        (I.R.S. Employer  Identification No.)
   incorporation or organization)


60 Decibel Road, State College, PA              16801
(Address of principal executive offices)       (Zip Code)


                            (814) 238-2461
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                              Yes  X     No
                                 -----      -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Common Stock, $.10 Par Value - 9,102,644 shares as of October 30, 1998.



<PAGE>


                                      INDEX

                             C-COR ELECTRONICS, INC.



PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements (unaudited).

              Condensed  consolidated  balance  sheets  -- June  26,  1998,  and
              September 25, 1998.

              Condensed consolidated  statements of operations -- thirteen weeks
              ended September 25, 1998, and September 26, 1997.

              Condensed consolidated  statements of cash flows -- thirteen weeks
              ended September 25, 1998, and September 26, 1997.

              Notes to condensed  consolidated financial statements -- September
              25, 1998.



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



PART II.  OTHER INFORMATION

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

<PAGE>

<TABLE>
Item 1.  Financial Statements
<CAPTION>

                             C-COR ELECTRONICS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS




                                                            September 25,      June 26,
                                  ASSETS                         1998            1998
                                                             -----------      ----------
                                                             (Unaudited)         (Note)
                                                                     (000's omitted)
<S>                                                          <C>              <C>
CURRENT ASSETS
  Cash and cash equivalents                                  $       596      $   2,313
  Marketable securities                                              356            356
  Accounts receivable                                             16,935         19,404
                                                             -----------      ----------
                                                                  17,887         22,073
                                                             -----------      ----------
  Inventories:
    Raw materials                                                 13,621         12,770
    Work-in-process                                                2,701          1,755
    Finished goods                                                 1,536          2,850
                                                             -----------      ----------
      Total inventories                                           17,858         17,375
                                                             -----------      ----------
  Deferred taxes                                                   2,623          2,797
  Property held for sale, net                                      1,281              0
  Other current assets                                             2,394          2,468
                                                             -----------      ----------
TOTAL CURRENT ASSETS                                              42,043         44,713
                                                             -----------      ----------
PROPERTY, PLANT, AND EQUIPMENT, NET                               25,418         27,751
INTANGIBLE ASSETS AND OTHER LONG-TERM ASSETS, NET                  3,397          3,054
                                                             -----------      ----------
TOTAL ASSETS                                                 $    70,858      $  75,518
                                                             ===========      ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                   $    14,719      $  16,029
  Line-of-credit                                                       0              0
  Current portion of long-term debt                                  156            854
  Net current liabilities of discontinued operations                  20            517
                                                             -----------      ----------
TOTAL CURRENT LIABILITIES                                         14,895         17,400
                                                             -----------      ----------
LONG-TERM DEBT, less current portion                               1,752          5,513
DEFERRED TAXES                                                     1,298          1,374
OTHER LONG-TERM LIABILITIES                                        1,166          1,041
                                                             -----------      ----------
TOTAL LIABILITIES                                                 19,111         25,328
                                                             -----------      ----------
SHAREHOLDERS' EQUITY
  Common Stock, $.10 par; authorized shares 
   24,000,000; issued shares of 9,695,560 on 09/25/98,
   and 9,672,128 on 06/26/98.                                        970            967
  Additional paid-in capital                                      20,566         20,341
  Retained earnings                                               36,546         34,877
  Accumulated other comprehensive loss                               (75)           (99)
  Treasury stock                                                  (6,260)        (5,896)
                                                             -----------      ----------
TOTAL SHAREHOLDERS' EQUITY                                        51,747         50,190
                                                             -----------      ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                     $    70,858      $  75,518
                                                             ===========      ==========


<FN>
Note:  The balance sheet at June 26, 1998, has been derived from audited 
        financial statements at that date.

See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>

<TABLE>
                             C-COR ELECTRONICS, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>

                                                    Thirteen Weeks Ended
                                               September 25,        September 26,
                                                    1998                1997
                                                -----------          -----------
                                             (000's omitted, except per share data)
<S>                                             <C>                 <C>
 NET SALES                                      $   33,216          $   37,065
                                                -----------          -----------

 COSTS AND EXPENSES:
   Cost of sales                                    25,625              28,473 
   Selling, general and administrative 
     expenses                                        3,428               3,555 
   Research and product development costs            2,062               1,773 
   Interest expense                                     32                  77 
   Investment income                                   (40)                 (6)
   Foreign exchange loss (gain)                         55                 (21)
   Other (income) expense                              (33)                322
                                                -----------          -----------
                                                    31,129              34,173 
                                                -----------          -----------

 INCOME FROM CONTINUING OPERATIONS 
   BEFORE INCOME TAXES                               2,087               2,892 

 INCOME TAX EXPENSE                                    706               1,011
                                                -----------          -----------

 INCOME FROM CONTINUING OPERATIONS                   1,381               1,881 

 DISCONTINUED OPERATIONS:
 Gain on disposal of discontinued
   business segment, less applicable
   income tax expense                                  288                   0 
                                                -----------          -----------

 NET INCOME                                     $    1,669           $   1,881 
                                                ===========          ===========

 NET INCOME PER SHARE - (BASIC):

   Continuing operations                        $     0.15           $    0.21 
   Discontinued operations                            0.03                0.00
                                                -----------          -----------
 NET INCOME PER SHARE                           $     0.18           $    0.21 
                                                ===========          ===========

 NET INCOME PER SHARE - (DILUTED):

   Continuing operations                        $     0.15           $    0.20
   Discontinued operations                            0.03                0.00
                                                -----------          -----------
 NET INCOME PER SHARE                           $     0.18           $    0.20 
                                                ===========          ===========


<FN>
 See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                             C-COR ELECTRONICS, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



                                                                 Thirteen Weeks Ended          
                                                            September 25,     September 26,      
                                                                1998              1997         
                                                            -----------       -----------      
                                                                  (000's omitted)

 <S>                                                        <C>              <C>               
 OPERATING ACTIVITIES
 Net Income                                                 $   1,669        $     1,881       
   Adjustments to reconcile net income to net cash and cash equivalents provided
     by operating activities:
   Depreciation and amortization                                1,912              1,623
   (Gain) on disposal of discontinued operations,
     net of tax benefit                                          (288)                 0
   Provision for deferred retirement salary plan                  125                 87       
   Changes in operating assets and liabilities:
   Accounts receivable                                          2,469             (1,059)
   Inventories                                                   (483)              (232)       
   Other assets                                                  (269)               146       
   Accounts payable                                             1,063              1,001      
   Accrued liabilities                                         (2,373)             2,370        
   Deferred income taxes                                           98               (166)
   Discontinued operations - working capital changes
     and noncash charges                                         (209)              (545)
 NET CASH AND CASH EQUIVALENTS PROVIDED BY                  -----------       -----------      
   OPERATING ACTIVITIES                                         3,714              5,106       
                                                            -----------       -----------      
 INVESTING ACTIVITIES
   Purchase of property, plant and equipment                     (836)            (1,505)      
   Investing activities of discontinued operations                  0                 22 
 NET CASH AND CASH EQUIVALENTS                              -----------       -----------      
   USED IN  INVESTING ACTIVITIES                                 (836)            (1,483)      
                                                            -----------       -----------      
 FINANCING ACTIVITIES
   Payment of debt and capital lease obligations               (4,459)              (207)      
   Proceeds from line-of-credit                                   670             12,792       
   Payment of line-of-credit                                     (670)           (16,258)      
   Issue common stock to employee stock purchase plan              15                 12
   Proceeds from exercise of stock options                        213                 57
   Purchase of treasury stock                                    (364)                 0
 NET CASH AND CASH EQUIVALENTS  USED IN                     -----------       -----------      
   FINANCING ACTIVITIES                                        (4,595)            (3,604)      
                                                            -----------       -----------      
 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              (1,717)                19       
 Cash and cash equivalents at beginning of period               2,313                452       
                                                            -----------       -----------      
 CASH AND CASH EQUIVALENTS AT END OF PERIOD                 $     596        $       471       
                                                            ===========       ===========      
<FN>
 See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                            C-COR ELECTRONICS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. The accompanying, unaudited, condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information,  and in the opinion of management,  contain all
adjustments  (consisting  only of normal,  recurring  adjustments)  necessary to
fairly  present the Company's  financial  position as of September 25, 1998, and
the results of its operations for the thirteen-week period then ended. Operating
results  for the  thirteen-week  period are not  necessarily  indicative  of the
results  that may be expected  for the year ending  June 25,  1999.  For further
information, refer to financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended June 26, 1998.

2. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

<TABLE>
Accounts payable and accrued liabilities consist of:
<CAPTION>

                                                  September 25,            June 26,
                                                      1998                  1998
                                                ----------------       ----------------
                                                           (000's omitted)
<S>                                             <C>                    <C>
Accounts payable                                        $ 6,847                $ 5,784
Accrued incentive plan expense                              253                  1,716
Accrued vacation expense                                  1,394                  1,435
Accrued salary expense                                    1,205                    719
Accrued salary and sales tax expense                        449                    903
Accrued warranty expense                                  1,879                  1,716
Accrued workers compensation 
  self-insurance expense                                  1,404                  1,319
Accrued restructuring costs                                  87                    625
Accrued other                                             1,201                  1,812 
                                                ----------------       ----------------
                                                        $14,719                $16,029
                                                ================       ================
</TABLE>

3. COMPREHENSIVE INCOME:

During the quarter ended  September 25, 1998, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income"  (Statement  130),  which is required for fiscal years  beginning  after
December  15,  1997.   Statement   130   establishes   standards  for  reporting
comprehensive  income  and  its  components  in a full  set  of  general-purpose
financial  statements.  The components of accumulated other comprehensive income
(loss), net of tax, of the Company are as follows: <TABLE> <CAPTION>
                                                        September 25,             June 26,
                                                            1998                    1998
                                                         -----------             ----------
                                                                  (000's omitted)
<S>                                                        <C>                      <C>    
Foreign currency translation adjustments                   $   (68)                 $  (92)
Unrealized gain on equity securities                            (7)                     (7)
                                                         ----------              ----------
Accumulated other comprehensive income (loss)              $   (75)                 $  (99)
                                                         ==========              ==========
</TABLE>
The  components  of  comprehensive  income of the Company for the  thirteen-week
periods ended September 25, 1998, and September 26, 1997, are as follows:
<TABLE>
<CAPTION>
                                                                  Thirteen Weeks Ended
                                                             September 25,     September 26,
                                                                   1998              1997
                                                                 --------          --------
                                                                       (000's omitted)
<S>                                                               <C>               <C>    
Net income                                                        $ 1,669           $ 1,881
Other comprehensive income, net of tax:
    Foreign currency translation adjustments                           16                11
    Unrealized gains on equity securities                               -                 2
                                                                  --------         --------
Other comprehensive income                                             16                13
(net of taxes of $8 and $6)           
                                                                  --------         --------
Comprehensive income                                              $ 1,685           $ 1,894
                                                                  ========         ========
</TABLE>

4. NET INCOME PER SHARE:

Statement  of  Financial  Accounting  Standards  No. 128,  "Earnings  Per Share"
(Statement 128),  became effective for financial  statements  issued for periods
ending after December 15, 1997. The Company adopted this Statement in the second
quarter  of  fiscal  year  1998 and has  restated  prior  periods  presented  as
required.

Basic  earnings  (loss) per share are  computed  based on the  weighted  average
number of common shares outstanding,  excluding any dilutive options and awards.
Dilutive  earnings  (loss) per share are computed based on the weighted  average
number of common shares  outstanding  plus the dilutive  effect of options.  The
dilutive  effect of options is calculated  under the treasury stock method using
the average market price for the period.  Net income per share is calculated for
the periods presented as follows: <TABLE> <CAPTION>
                                                     Thirteen Weeks Ended             
                                               September 25,         September 26,        
                                                   1998                 1997           
                                                ------------         ------------       
                                             (000's omitted, except per share data)
<S>                                                  <C>                  <C>            
Basic:
Weighted average shares outstanding                  9,165                9,139          
                                              ------------         ------------       
Total                                                9,165                9,139          


Income from continuing operations                $   1,381            $   1,881          
Gain from discontinued 
  operations                                           288                    0        
                                              ------------         ------------       
Net income                                       $   1,669            $   1,881          
                                              ------------         ------------       

Net income per share
  Continuing operations                          $    0.15            $    0.21          
  Discontinued operations                             0.03                 0.00         
                                              ------------         ------------       
Net income per share                             $    0.18            $    0.21          
                                              ============         ============       


Diluted:

Weighted average shares outstanding                  9,165                9,139          
Weighted average common stock
  equivalents                                          230                  120          
                                              ------------         ------------       
Total                                                9,395                9,259          

Income from continuing operations                $   1,381            $   1,881          
Gain from discontinued 
  operations                                           288                    0          
                                              ------------         ------------       
Net income                                       $   1,669            $   1,881          
                                              ------------         ------------       

Net income per share
  Continuing operations                          $    0.15            $    0.20          
  Discontinued operations                             0.03                 0.00         
                                              ------------         ------------       
Net income per share                             $    0.18            $    0.20          
                                              ============         ============
</TABLE>
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Conditions and
         Results of Operations

The following  discussion addresses the financial condition of the Company as of
September 25, 1998, and the results of operations for the  thirteen-week  period
ended September 25, 1998,  compared with the same period of the prior year. This
discussion  should be read in conjunction with the  Management's  Discussion and
Analysis  section  for the  fiscal  year ended June 26,  1998,  included  in the
Company's Annual Report on Form 10-K.

Disclosure Regarding Forward-Looking Statement:

Some of the  information  presented in this report  constitutes  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, including without limitation,  continuation of increased domestic spending
for  network  upgrades,  the  continuation  of  competitive  pricing  pressures,
anticipated   increased   spending  on  product   development,   the   continued
availability of capital  resources and the Company's ability to assess the risks
of the year 2000 issue with respect to its operations,  and to resolve them in a
timely manner.  Although the Company believes that its expectations are based on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operations,  there can be no  assurance  that  actual  results  will not  differ
materially  from its  expectations.  Factors which could cause actual results to
differ from  expectations  include the timing of orders received from customers,
the gain or loss of significant customers,  changes in the mix of products sold,
changes in the cost and  availability  of parts and  supplies,  fluctuations  in
warranty  costs,  new  product  development   activities,   economic  conditions
affecting domestic and international  markets,  regulatory changes affecting the
telecommunications  industry,  in  general,  and the  Company's  operations,  in
particular, competition and changes in domestic and international demand for the
Company's   products  and  other  factors  which  may  impact   operations   and
manufacturing.  For additional  information concerning these and other important
factors which may cause the Company's  actual results to differ  materially from
expectations and underlying  assumptions,  please refer to the Company's reports
filed on Form 10-K and other  reports  filed with the  Securities  and  Exchange
Commission.

Results of Operations:

Net  income  for  the  thirteen-week   period  ended  September  25,  1998,  was
$1,669,000, which included income from continuing operations of $1,381,000 and a
gain on  disposal of  discontinued  operations  of  $288,000,  net of tax.  This
compares to net income of $1,881,000  for the same period of the prior year, all
of which derived from continuing operations.

Net  sales  for  the  thirteen-week   period  ended  September  25,  1998,  were
$33,216,000,  a decrease of 10% from the prior year's sales of  $37,065,000  for
the same period.  The decrease in sales was  primarily  attributable  to reduced
sales to  international  markets,  primarily  in Canada,  as well as in Asia and
Europe.  The  reduction  of sales to  international  markets more than offset an
increase in domestic sales for the quarter.

Domestic sales, as a percentage of total  consolidated  sales,  were 91% for the
quarter ended  September  25, 1998.  This compares to 72% for the same period of
the prior year.  Sales to domestic  customers  increased  14% during the quarter
ended  September  25,  1998,  compared to the same period of the prior year.  In
recent  periods,  the  Company  has  seen a steady  demand  from  domestic  CATV
operators  for  hybrid/fiber  coax (HFC)  distribution  equipment.  The  Company
believes the increased demand continues to be driven by network upgrade activity
resulting from demands on cable operators for improved  services,  affecting not
only  voice  and  video  requirements,  but also  demands  for  high-speed  data
transmission.

International  sales, as a percentage of total  consolidated  sales, were 9% for
the quarter ended  September 25, 1998.  This compares to 28% for the same period
of the prior year.  Sales to  international  customers  decreased 71% during the
quarter ended September 25, 1998, compared to the same period of the prior year.
The decrease for the quarter  resulted  primarily from reduced demand in Canada,
as well as in Asia and Europe.  These  markets  continue to  represent  distinct
markets for CATV equipment, and, in general, demand can be highly variable.

The Company's  backlog of sales orders at September 25, 1998, was  approximately
$23.9 million,  consisting of backlog from domestic and international  customers
of 78% and 22%, respectively.  This compares to a backlog of approximately $24.0
million at the end of the Company's fiscal year ended June 26, 1998,  consisting
of  backlog  from   domestic  and   international   customers  of  91%  and  9%,
respectively. The Company booked approximately $33.1 million of new sales orders
during the quarter ended September 25, 1998,  resulting in a book-to-bill  ratio
for the quarter of 1.00, compared to .91 at the end of the previous quarter.

Gross profit percentage for the  thirteen-week  period ended September 25, 1998,
was 22.9%  versus  23.2% for the same period of the prior year.  The decrease in
the gross  profit  margin for the  quarter is  primarily  a result of changes in
customer and product sales mix, and reduced  efficiencies  resulting  from lower
production  volumes,  compared to the same  period of the prior  year.  Although
pricing pressures continue, the Company has implemented  initiatives to mitigate
these pressures.  The Company has undertaken steps to lower  manufacturing costs
by  improving  manufacturing  processes  in  order  to  enhance  efficiency  and
productivity,  and by  redesigning  products  to enhance  manufacturability  and
reduce material costs.

Selling,  general and administrative expenses for the thirteen-week period ended
September  25,  1998,  were  $3,428,000,  a decrease of 4% over the prior year's
total of $3,555,000 for the same period.  The decrease is due to various selling
and administrative costs, including personnel and promotional costs.

Research  and  product  development  costs for the  thirteen-week  period  ended
September 25, 1998,  were  $2,062,000,  an increase of 16% over the prior year's
total of  $1,773,000  for the same  period.  The  increase is a result of higher
personnel  costs  and  increased  expenditures  due to the  Company's  continued
investments  in  new  products  and  technologies,   which  include   additional
development  costs for our new  Navicor(TM)  platform of product  introduced  in
fiscal year 1998. In  accordance  with the current  development  schedule of the
Navicor platform of products,  the Company now anticipates production release of
these  products  in several  phases  over the second  half of fiscal  year 1999.
Anticipated  new  product  development  initiatives  are  expected  to  increase
research and product development expenses in future periods.

Other income for the thirteen-week period ended September 25, 1998, was $33,000.
This  compares to other  expense of $322,000  for same period of the prior year.
The  decrease is primarily a result of expense  accrued in the first  quarter of
the prior year for settlement of certain litigation.

The effective income tax rate for the  thirteen-week  period ended September 25,
1998, was 33.8%.  This compares to an effective income tax rate of 35.0% for the
same period of the prior year.  Fluctuations  in the  effective  income tax rate
from period to period reflect changes in  non-deductible  amounts,  the relative
profitability related to both U.S. and non-U.S.  operations,  and differences in
statutory rates.

Results of Discontinued Operations:

On July 10, 1997, the Company announced the discontinuation of its digital fiber
optic business segment located in Fremont,  California,  in a wind-down  process
that was substantially  completed as of the quarter ended March 27, 1998. A gain
from the disposal of the discontinued  business segment of $288,000,  net of tax
of $80,000,  was  recorded  during the  quarter,  resulting  primarily  from the
settlement of certain warranty liabilities.

Liquidity and Capital Resources

The Company's current ratio at September 25, 1998,  increased to 2.8 from 2.6 at
June 26, 1998. Net cash  generated from operating  activities was $3,714,000 for
the quarter ended September 25, 1998, compared to $5,106,000 for the same period
of the prior year.  Working  capital was  $27,148,000  as of September 25, 1998,
compared to $27,313,000 at June 26, 1998.

Net cash  used in  investing  activities  was  $836,000  for the  quarter  ended
September  25,  1998,  compared to  $1,483,000  for the same period of the prior
year.  The decrease of cash used in investing  activities  was  primarily due to
reduced purchases of property, plant, and equipment, compared to the same period
of the prior year.

Net cash used in  financing  activities  was  $4,595,000  for the quarter  ended
September 25,1998, compared to $3,604,000 for the same period of the prior year.
On June 25, 1998 the Company  announced the closing of its  manufacturing  plant
located  in  Reedsville,  Pennsylvania,  in order to reduce  costs  and  improve
productivity and asset  utilization.  The Company had a Lease/Option to Purchase
Agreement with the Mifflin County Industrial Development Corporation (MCIDC) for
the building and improvements located in Reedsville,  Pennsylvania.  The Company
was the guarantor of several  borrowing  commitments  by the MCIDC for financing
the facility and  improvements.  On August 10,  1998,  the Company  executed its
option and purchased the facility for approximately $1,454,000, representing the
remaining  outstanding  principal balances of the various loan commitments.  The
Company used its available capital resources for the purchase.  In addition,  on
August 20,  1998,  the  Company  paid off the  remaining  balances  of two loans
secured  through  the  Pennsylvania  "Sunny  Day"  Fund.  The loans  funded  the
expansion and  renovation of the Company's  State College  facility in 1995. The
loan balances were paid off in order to eliminate certain restrictive  covenants
associated with the loan agreements. The principal balance of the two loans paid
off were $409,000 and $2,506,000,  respectively.  The Company used its available
capital resources to pay off the loans.  Additional financing activities for the
quarter  resulted from  borrowings and payments on the Company's  line-of-credit
and other long-term debt.

The  Company  has a  stock  repurchase  program  which  allows  the  Company  to
repurchase  up to  500,000  shares of C-COR  Common  Stock.  The  shares  may be
purchased  from  time to time in the open  market  through  block  or  privately
negotiated transactions,  or otherwise. The Company intends to use its currently
available  capital  resources to fund the purchases.  The  repurchased  stock is
being held by the  Company as  treasury  stock to be used to meet the  Company's
obligations  under its  present  and  future  stock  option  plans and for other
corporate  purposes.  As of September  25,  1998, a total of 46,943  shares were
repurchased under this stock repurchase  program, of which 36,601 were purchased
during the quarter. The total shares being held by the Company as treasury stock
as of September 25, 1998, were 546,943.

The Company  maintains a  line-of-credit  with a bank,  pursuant to which it may
borrow the lesser of $23,000,000 or a percentage of eligible accounts receivable
and  inventory.  The borrowings are  collateralized  by accounts  receivable and
inventory. The line-of-credit is committed through January 31, 1999. The Company
anticipates  renewing this  line-of-credit  on or before  January 31, 1999.  The
Company had no borrowings on this line-of-credit as of September 25, 1998. Based
upon the  Company's  analysis of eligible  accounts  receivable  and  inventory,
approximately $16,624,000 was available to borrow as of September 25, 1998.

Management  believes that  operating  cash flow,  as well as the  aforementioned
financing  source,  will adequately  provide for all cash  requirements  for the
foreseeable future,  subject to requirements that additional growth or strategic
development might dictate.

Recent Accounting Changes

In 1997, the Financial  Accounting  Standards  Board (FASB) issued  Statement of
Financial  Accounting  Standards  No.  130,  "Reporting   Comprehensive  Income"
(Statement  130), which was adopted during the quarter ended September 25, 1998.
This Statement establishes standards for reporting and classifying components of
comprehensive   income  in  the  financial  statements  and  requires  that  the
accumulated balance of other comprehensive  income be displayed  separately from
retained  earnings and additional  paid-in-capital  in the equity section of the
financial statements.

Year 2000

The  Company  is aware of the  issues  associated  with the  limitations  of the
programming code in many existing computer systems, whereby the computer systems
may not properly  recognize  date-sensitive  information as the millennium (year
2000) approaches.  The Company's  computer systems include,  but are not limited
to,  computer  systems  embedded in production  equipment,  products  containing
computer systems,  business data processing systems,  production  management and
planning systems, and personal computers. Systems that do not properly recognize
such information could generate erroneous data or cause a system to fail. During
the  thirteen-week  period ended  September 25, 1998, the Company  continued its
ongoing process of evaluating its information technology infrastructure for year
2000.  In addition,  by the end of its second  quarter of fiscal year 1999,  the
Company expects to correspond with its principal customers,  suppliers,  vendors
and subcontractors to ascertain their readiness for the year 2000. The Company's
current  timetable is that it expects to complete its Year 2000 risk  assessment
by the end of its second quarter of fiscal year 1999,  however,  there can be no
assurance that the Company can meet this  timetable.  While the total  estimated
cost of  these  efforts  is  difficult  to  predict  with  accuracy,  based on a
preliminary evaluation, the Company believes that there should not be a material
adverse impact on its operating results or financial  condition.  However,  Year
2000 issues could have a significant impact on the Company's  operations and its
financial  results if  modifications  cannot be completed on a timely basis,  if
unforeseen  needs or  problems  arise,  or if there  are  unforeseen  compliance
problems  with the systems  operated  by its  customers,  suppliers,  vendors or
subcontractors.  Moreover, the change to the year 2000 may negatively impact the
Company's customers or the CATV industry as a whole,  causing reduced demand and
market  disruption in anticipation  of, or following,  the year 2000. Upon final
completion of the evaluation of its information  technology  infrastructure  for
Year 2000,  the Company will  establish a  contingency  plan  detailing  how the
Company will operate in the event that the Company is not Year 2000 compliant in
a timely manner. In addition, the Company is uncertain as to the most reasonably
likely  worst case  scenario,  however,  upon  completion  of its Year 2000 risk
assessment,  the  Company  expects to be able to  ascertain  the effects of such
scenario, and develop a remedial plan.

<PAGE>
PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

The following exhibit is included herein:

(27) Financial Data Schedule

Reports on Form 8-K

On July 2, 1998, the  Registrant  filed a Form 8-K to report that the Registrant
announced that on June 16, 1998, its Board of Directors  elected David A. Woodle
as the Registrant's  President and Chief Executive  Officer,  effective July 20,
1998.





                                   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.


                                               C-COR ELECTRONICS, INC.
                                                     (Registrant)

Date: November 9, 1998                        /s/ William T. Hanelly
                                               Vice President-Finance,
                                               Secretary & Treasurer
                                               (Principal Financial Officer)

Date: November 9, 1998                        /s/ Joseph E. Zavacky
                                               Controller & Assistant
                                               Secretary
                                               (Principal Accounting Officer)