SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
    Act of 1934

For the quarterly period ending               September 30, 1997
                               ------------------------------------------------

                                       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:           1-10104

                              United Capital Corp.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                     04-2294493
--------------------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

          9 Park Place, Great Neck, New York             11021
--------------------------------------------------------------------------------
    (Address of principal executive offices)           (Zip Code)

                                  516-466-6464
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
--------------------------------------------------------------------------------
              (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. [X] Yes [ ] No

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 5,285,047 shares outstanding
                             as of November 5, 1997.

                                  Page 1 of 17
<PAGE>

                     UNITED CAPITAL CORP. AND SUBSIDIARIES

                                      INDEX

                          PART I FINANCIAL INFORMATION
                                                                            PAGE
                                                                            ----

ITEM 1.    FINANCIAL STATEMENTS

           Consolidated Balance Sheets as
           of  September  30, 1997 and December 31, 1996                      3

           Consolidated Statements of  Income for
           the Three Months Ended September 30, 1997 and
           1996                                                               4

           Consolidated Statements of  Income for
           the Nine Months Ended September 30, 1997 and
           1996                                                               5

           Consolidated Statements of Cash Flows for
           the Nine Months Ended September 30, 1997 and
           1996                                                           6 - 7

           Notes to Consolidated Financial Statements                     8 - 11

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 11 - 16

                            PART II OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS                                                  16

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                   16

SIGNATURES                                                                    17


                                  Page 2 of 17
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES

   CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                   (UNAUDITED)
<TABLE>
<CAPTION>
      ASSETS                                                                       1997                               1996
      ------                                                                       ----                               ----

CURRENT ASSETS:                                                                                                              
<S>                                                                              <C>                               <C>       
     Cash and cash equivalents                                                 $  3,636,582                      $  3,177,878
     Marketable securities                                                          378,720                           313,294
     Notes and accounts receivable, net                                          17,609,287                        22,443,743
     Inventories                                                                  7,005,013                         7,853,229
     Prepaid expenses and other current assets                                      724,389                           801,639
     Deferred income taxes                                                        1,947,250                         1,831,768
                                                                                 ----------                        ----------

              Total current assets                                               31,301,241                        36,421,551
                                                                                 ----------                        ----------
                                                                                                                             
PROPERTY, PLANT AND EQUIPMENT, net                                                7,742,276                         7,694,438
                                                                                                                             
                                                                                                                             

REAL PROPERTY HELD FOR RENTAL, net                                               56,413,305                        63,842,891
                                                                                                                             

                                                                                                                             
NONCURRENT NOTES RECEIVABLE                                                       7,441,783                         5,931,744
                                                                                                                             

OTHER ASSETS                                                                     11,269,097                         5,912,647
                                                                                                                             
                                                                                                                             
DEFERRED INCOME TAXES                                                             2,749,911                         2,017,247
                                                                                                                             
                                                                               ------------                      ------------
                                                                                                                             
                Total assets                                                   $116,917,613                      $121,820,518
                                                                               ============                      ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                                               1997                             1996
------------------------------------                                               ----                             ----

 CURRENT LIABILITIES:
<S>                                                                            <C>                               <C>       
       Current maturities of long-term debt                                     $ 5,611,104                       $ 7,711,408
       Borrowings under credit facility                                           6,900,000                        10,031,000
       Accounts payable and accrued liabilities                                  16,912,957                        17,286,927
       Income taxes payable                                                      10,738,118                         7,212,520
                                                                               ------------                      ------------

                    Total current liabilities                                    40,162,179                        42,241,855
                                                                               ------------                      ------------

 LONG-TERM LIABILITIES:

       Borrowings under credit facility                                           5,600,000                         9,789,000
       Long-term debt                                                            27,727,630                        31,670,258
       Other long-term liabilities                                                8,272,243                         8,544,581
                                                                               ------------                      ------------

                    Total liabilities                                            81,762,052                        92,245,694
                                                                               ------------                      ------------

 COMMITMENTS AND CONTINGENCIES

 STOCKHOLDERS' EQUITY:

       Common stock                                                                 528,505                           534,612
       Additional paid-in capital                                                 6,815,345                         7,415,664
       Retained earnings                                                         27,659,744                        21,515,762
       Net unrealized gain on marketable securities, net of  tax                    151,967                           108,786
                                                                               ------------                      ------------

                    Total stockholders' equity                                   35,155,561                        29,574,824
                                                                               ------------                      ------------
                    Total liabilities and stockholders' equity                 $116,917,613                      $121,820,518
                                                                               ============                      ============
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE BALANCE SHEETS.

                                  Page 3 of 17
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                  ------------------
                                                                      September 30, 1997      September 30, 1996
                                                                      ------------------      ------------------
REVENUES:
<S>                                                                   <C>                       <C>        
      Net sales                                                       $13,669,790               $14,765,953
      Rental revenues from real estate operations                       5,890,116                 6,482,497
                                                                        ---------               -----------

      Total revenues                                                   19,559,906                21,248,450
                                                                       ----------               -----------

COSTS AND EXPENSES:
      Costs of sales                                                    9,624,991                11,613,678
      Real estate operations -
          Mortgage interest expense                                       746,655                   944,740
          Depreciation expense                                          1,442,198                 1,516,912
          Other operating expenses                                      1,859,725                 2,133,374
      General and administrative expenses                               1,767,746                 1,923,111
      Selling expenses                                                  1,530,694                 1,622,313
                                                                        ---------               -----------

          Total costs and expenses                                     16,972,009                19,754,128
                                                                       ----------               -----------

          Operating income                                              2,587,897                 1,494,322
                                                                        ---------               -----------

OTHER INCOME (EXPENSE):
      Interest income                                                     445,808                   273,930
      Interest expense                                                   (339,335)                 (220,501)
      Other income and expense                                            120,779                   350,497
                                                                          -------               -----------

          Total other income (expense)                                    227,252                   403,926
                                                                          -------               -----------

          Income before income taxes                                    2,815,149                 1,898,248

Provision for income taxes                                              1,296,000                   912,000
                                                                        ---------               -----------


      Net income                                                      $ 1,519,149                $  986,248
                                                                      ===========               ===========

Earnings per share:
          Net income                                                  $       .28                $      .18
                                                                      ===========                ==========

Weighted average number of common shares outstanding                    5,353,851                 5,517,245
                                                                      ===========                ==========
</TABLE>

          THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS

                                  Page 4 of 17

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                     Nine Months Ended
                                                                                     -----------------
                                                                       September 30, 1997      September 30, 1996
                                                                       ------------------      ------------------
REVENUES:
<S>                                                                       <C>                    <C>        
      Net sales                                                           $43,312,206            $45,465,910
      Rental revenues from real estate operations                          17,978,497             18,309,379
                                                                           ----------             ----------

      Total revenues                                                       61,290,703             63,775,289
                                                                           ----------             ----------

COSTS AND EXPENSES:
      Costs of sales                                                       31,747,415             35,438,022
      Real estate operations -
          Mortgage interest expense                                         2,335,656              2,878,948
          Depreciation expense                                              4,362,341              4,762,807
          Other operating expenses                                          5,016,537              6,023,164
      General and administrative expenses                                   5,672,808              6,428,323
      Selling expenses                                                      4,523,623              4,959,316
                                                                            ---------              ---------

          Total costs and expenses                                         53,658,380             60,490,580
                                                                           ----------             ----------

          Operating income                                                  7,632,323              3,284,709
                                                                            ---------              ---------

OTHER INCOME (EXPENSE):
      Interest income                                                       1,997,698                766,158
      Interest expense                                                     (1,226,224)              (781,762)
      Other income and expense                                              2,766,185              3,393,405
                                                                            ---------              ---------

          Total other income (expense)                                      3,537,659              3,377,801
                                                                            ---------              ---------

          Income before income taxes                                       11,169,982              6,662,510

Provision for income taxes                                                  5,026,000              2,830,000
                                                                            ---------              ---------

       Net income                                                          $6,143,982             $3,832,510
                                                                           ==========             ==========

Earnings per share:
          Net income                                                       $     1.15             $      .69
                                                                           ==========             ==========

Weighted average number of common shares outstanding                        5,345,476              5,546,888
                                                                           ==========             ==========
</TABLE>

           THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS

                                  Page 5 of 17
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                              1997                        1996
                                                                           -----------                 -----------
Cash Flows From Operating Activities:
<S>                                                                        <C>                         <C>       
      Net income                                                           $6,143,982                  $3,832,510
                                                                           ----------                  ----------
      Adjustments to reconcile net income to net cash
            provided by operating activities:
      Depreciation and amortization                                         5,374,377                   5,989,480
      Loss from equity investments                                            238,155                           -
      Changes in assets and liabilities (A)                                 9,257,622                   2,366,499
                                                                            ---------                   ---------

            Total adjustments                                              14,870,154                   8,355,979
                                                                           ----------                   ---------

                 NET CASH PROVIDED BY OPERATING ACTIVITIES                 21,014,136                  12,188,489
                                                                           ----------                  ----------

Cash Flows from Investing Activities:
            Purchase of marketable securities                                       -                    (101,962)
            Investment in and advances to joint venture                    (5,526,494)                          -
            Acquisition of property, plant and equipment                     (548,216)                   (544,506)
                                                                             ---------                   ---------

                 NET CASH USED IN INVESTING ACTIVITIES                     (6,074,710)                   (646,468)
                                                                           -----------                   ---------

Cash Flows from Financing Activities:
            Principal payments on mortgage commitments, notes and loans    (6,554,297)                 (9,467,664)
            Net borrowings under credit facility                           (7,320,000)                   (685,000)
            Purchase and retirement of common shares                         (665,927)                 (2,858,450)
            Proceeds from exercise of stock options                            59,502                     906,250
                                                                           ----------                 -----------

                 NET CASH USED IN FINANCING ACTIVITIES                    (14,480,722)                (12,104,864)
                                                                           ------------               ------------

Net increase (decrease) in cash and cash equivalents                          458,704                    (562,843)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                            3,177,878                   3,527,925
                                                                            ---------                   ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $3,636,582                  $2,965,082
                                                                           ==========                  ==========
</TABLE>


                                  Page 6 of 17
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Continued)
                                   (UNAUDITED)

                                                      1997            1996
                                                     -----            -----
Supplemental Disclosures of Cash Flow
     Information:
            Cash Paid During the Period For:
                  Interest                          $3,757,000      $3,802,000
                  Taxes                              2,300,000         897,000
                                                    ===========     ==========


Supplemental Schedule of Noncash Investing
     and Financing Activities:
            Noncash Investing Activities:
                  Capital Lease Obligations          $511,000               -
                                                    ==========
                                                               
                  (A)  Changes in assets  and  liabilities  for the nine  months
                       ended September 30, 1997 and 1996, are as follows:

Decrease in notes and accounts receivable, net      $4,834,456      $1,099,155
Decrease (increase) in inventories                     848,216        (703,615)
Decrease (increase) in prepaid expenses
     and other current assets                           77,250          (2,237)
Increase in deferred income taxes                     (870,391)       (801,614)
Decrease in real property held for rental, net       3,066,951       2,613,468
Decrease (increase) in noncurrent notes receivable  (1,510,039)          1,524
Increase in other assets                               (68,110)       (932,156)
Decrease in accounts payable and
     accrued liabilities                              (373,970)     (1,257,335)
Increase in income taxes payable                     3,525,597       2,067,527
Increase (decrease) in other long-term liabilities    (272,338)        281,782
                                                    -----------     -----------

            Total                                   $9,257,622      $2,366,499
                                                    ==========      ==========


       THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN
                        INTEGRAL PART OF THESE STATEMENTS


                                  Page 7 of 17
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in  accordance  with the  instructions  to Form 10-Q used for quarterly
reports under Section 13 or 15(d) of the  Securities  Exchange Act of 1934,  and
therefore,  do not include all  information  and footnotes  necessary for a fair
presentation  of financial  position,  results of  operations  and cash flows in
conformity with generally accepted accounting principles.

         The consolidated financial information included in this report has been
prepared in conformity  with the  accounting  principles and methods of applying
those accounting principles,  reflected in the consolidated financial statements
included  in the  Annual  Report  on Form 10-K  filed  with the  Securities  and
Exchange Commission for the year ended December 31, 1996.

         All  adjustments  necessary for a fair statement of the results for the
interim periods presented have been recorded.

         The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.

INVENTORIES

The components of inventory are as follows:

                              September 30, 1997       December 31, 1996
                              ------------------       -----------------

Raw materials                  $3,553,424                 $3,893,865
Work in process                 1,709,030                  2,126,849
Finished goods                  1,742,559                  1,832,515
                               ----------                 ----------
                               $7,005,013                 $7,853,229
                               ==========                 ==========



                                  Page 8 of 17

<PAGE>
CONTINGENCIES

         The Registrant has undertaken the completion of  environmental  studies
and/or remedial action at Metex' two New Jersey facilities.

         The process of remediation has begun at one facility pursuant to a plan
filed with the New Jersey  Department  of  Environmental  Protection  and Energy
("NJDEPE").  Environmental experts engaged by the Registrant estimate that under
the  most  probable  remediation  scenario,  the  remediation  of  this  site is
anticipated to require initial  expenditures of $860,000,  including the cost of
capital equipment,  and $86,000 in annual operating and maintenance costs over a
15-year period.

         Environmental  studies at the second facility indicate that remediation
may be  necessary.  Based  upon the  facts  presently  available,  environmental
experts have advised the  Registrant  that under the most  probable  remediation
scenario,  the estimated  cost to remediate  this site is anticipated to require
$2.3 million in initial costs,  including  capital equipment  expenditures,  and
$258,000 in annual  operating and maintenance  costs over a 10-year period.  The
Registrant  may revise  such  estimates  in the  future  due to the  uncertainty
regarding the nature,  timing and extent of any remediation  efforts that may be
required at this site, should an appropriate regulatory agency deem such efforts
to be necessary.

         The foregoing estimates may also be revised by the Registrant as new or
additional information in these matters become available or should the NJDEPE or
other regulatory agencies require additional or alternative  remediation efforts
in the future.  It is not currently  possible to estimate the range or amount of
any such liability.

         Although the  Registrant  believes  that it is entitled to full defense
and indemnification with respect to environmental  investigation and remediation
costs under its insurance policies,  the Registrant's  insurers have denied such
coverage.  Accordingly,  the  Registrant  has  filed an action  against  certain
insurance carriers seeking defense and indemnification with respect to all prior
and future costs incurred in the  investigation  and remediation of these sites.
Upon the advice of counsel,  the  Registrant  believes that based upon a present
understanding of the facts and the present state of the law in New Jersey, it is
probable that the Registrant will prevail in the pending  litigation and thereby
access all or a very  substantial  portion of the insurance  coverage it claims;
however, the ultimate outcome of litigation cannot be predicted.

         As a result of the foregoing,  the Registrant has not recorded a charge
to  operations  for  the   environmental   remediation,   noted  above,  in  the
consolidated  financial  statements,  as  anticipated  proceeds  from  insurance
recoveries are expected to offset such  liabilities.  The Registrant has reached
settlements with several insurance carriers in this matter.

         At September 30, 1997 and December 31, 1996, a total of $2.9 million in
anticipated  insurance recoveries was recorded in the accompanying  consolidated
financial statements and is included in other assets. Additionally,  in 1995 the
Company  received  approximately  $4.1  million  of  insurance  recoveries.  The
remaining  balance of $2.9  million at  September  30,  1997 (from a total of $7
million) is in dispute  with the  Registrant's  insurance  carriers.  Management
believes that recoveries in excess of the amounts  reflected in the accompanying
consolidated  financial  statements,  are available under insurance policies but
have not been recorded. There can be no assurance,  however, that the Registrant
will prevail in its efforts to obtain  amounts at or in excess of the  estimated
recoveries.


                                  Page 9 of 17
<PAGE>

         In the opinion of management,  these matters will be resolved favorably
and such  amounts,  if any,  not  recovered  under  the  Registrant's  insurance
policies will be paid gradually over a period of years and, accordingly,  should
not have a material  adverse  effect upon the  business,  liquidity or financial
position of the Registrant.  However, adverse decisions or events,  particularly
as to the merits of the  Registrant's  factual  and legal  basis could cause the
Registrant  to change its estimate of liability  with respect to such matters in
the future.

         The  Registrant  is  involved  in various  other  litigation  and legal
matters which are being defended and handled in the ordinary course of business.
None of these  matters are  expected  to result in a judgment  having a material
adverse effect on the Registrant's consolidated financial position or results of
operations.

NET INCOME PER COMMON SHARE

         Net income per share  computations  for each quarterly period presented
are based on the weighted  average  number of common shares and dilutive  common
equivalent  shares  outstanding  during the  period.  Fully  diluted and primary
earnings  per common  share are  approximately  the same amounts for each of the
periods  presented.  Earnings  per share data is neither  restated  nor adjusted
currently to obtain  quarterly  amounts which equal the amount  computed for the
year-to-date.

         In February 1997,  Statement of Financial  Accounting Standard No. 128,
Earnings Per Share ("SFAS #128") was issued.  SFAS #128 changes the  methodology
utilized to compute  earnings per share and replaces primary EPS with basic EPS,
which does not include any dilution for potentially dilutive  securities.  Fully
diluted EPS, which is now called diluted EPS under SFAS #128, is still required.
This standard is effective for periods  ending after December 15, 1997 and early
application is prohibited. If EPS had been determined consistent with SFAS #128,
earnings per share would have been the proforma amounts indicated below:
<TABLE>
<CAPTION>

                                  Three Months Ended September 30     Nine Months ended September 30
                                  --------------------------------    ------------------------------
                                     1997             1996              1997             1996
                                     ----             ----              ----             ----
<S>                                  <C>              <C>               <C>              <C>  
Primary EPS, as reported             $.28             $ .18             $1.15            $ .69
Pro Forma Basic EPS                  $.29             $ .18             $1.16            $ .69

Fully Diluted EPS, as reported       $.28             $ .18             $1.14            $ .69
Pro Forma Diluted EPS                $.28             $ .18             $1.15            $ .69

</TABLE>

CREDIT FACILITY

         Effective  September  30,  1997,  the  Registrant  amended its existing
Revolving  Credit Agreement  ("Credit  Agreement") with two banks to provide for
both a $7 million  term loan ("Term  Loan") and a $40 million  revolving  credit
facility  ("Revolver") and converted $7 million of amounts outstanding under the
Revolver  to  borrowings  under the Term  Loan.  Under  the terms of the  Credit
Agreement,  the Registrant will be provided with eligibility  based upon the sum
of (i) 50% of the aggregate annualized and normalized year-to-date net operating
income of eligible  properties,  as defined,  capitalized  at 11.5% and (ii) the
lesser of $12 million or the sum of 75% of eligible accounts  receivable and 50%
of  eligible  inventory,  as  defined.  Eligibility  is also  limited by amounts
outstanding  under  the Term  Loan.  At  September  30,  1997  the  Registrant's
eligibility under the Revolver was $40 million,  based upon the above terms. The
Credit  Agreement also contains  certain  financial and  restrictive  covenants,
including minimum consolidated equity,  interest coverage, debt service coverage
and capital  expenditures  (other than for real  estate).  Borrowings  under the
Revolver, at the Registrant's option, bear interest at Prime or LIBOR plus 1.75%
while  borrowings  under the Term Loan bear  interest at 90 day LIBOR plus 1.4%.
The Term Loan is payable in quarterly principal  installments of $350,000,  with
final  payment  on  September  30,  2002.  Effective  September  30,  1997,  the
Registrant entered into an interest-rate  swap agreement to effectively  convert
its floating  rate term loan to a fixed rate basis,  thus reducing the impact of
interest  rate  changes  on  future  expense.  Under  the  swap  agreement,  the
Registrant  agreed to exchange with the  counterparty  (a  commercial  bank) the
difference   between  the  fixed  and  floating  rate  interest   amounts.   The
differential to be paid or

                                 Page 10 of 17
<PAGE>
received on the interest rate swap is recognized  over the term of the agreement
as an adjustment to interest  expense.  The fair value of the swap  agreement is
not recognized in the financial statements.

USE OF ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

         Certain amounts have been  reclassified in the prior year  consolidated
financial  statements  and notes  thereto to present them on a basis  consistent
with the current year.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

         Revenues  for the three  month  period  ended  September  30, 1997 were
$19,560,000  versus $21,248,000 during the comparable period in 1996. Net income
for the third  quarter of 1997 was  $1,519,000  or $.28 per share as compared to
$986,000 or $.18 per share during the comparable 1996 period.

         Revenues  for the nine  month  period  ended  September  30,  1997 were
$61,291,000  versus $63,775,000 during the comparable period in 1996. Net income
for the period was  $6,144,000  or $1.15 per share as  compared to net income of
$3,833,000 or $.69 per share for the same period in 1996.

REAL ESTATE OPERATIONS

         Rental  revenues  from  real  estate  operations  decreased  9% and 2%,
respectively,  for the three month and nine month  periods  ended  September 30,
1997 as  compared  to the  comparable  periods  in  1996.  These  decreases  are
primarily  attributable  to  revenues  associated  with  properties  sold in the
current and prior year for significant gains.

         Mortgage interest expense decreased  $198,000 or 21% during the current
quarter and  $543,000 or 19% during the nine month period  ended  September  30,
1997, versus such expense of the corresponding  periods in 1996. These decreases
result from continuing  mortgage  amortization  which  approximated $6.1 million
during the last 12 months,  including repayments associated with properties sold
during the period.

         Depreciation   expense  associated  with  rental  properties  decreased
$75,000  or 5% during  the three  month  period  ended  September  30,  1997 and
$400,000  or 8%,  during the first nine months of 1997 as compared to such costs
during the  corresponding  periods of 1996. These decreases are primarily due to
the impact of properties sold in 1996.

         Operating  expenses  associated  with  the  management  of real  estate
properties  decreased  $274,000 or 13% during the current quarter and $1,007,000
or 17% during the nine month period ending September 30, 1997 as compared to the
same periods in 1996. The implementation of certain capital improvements in 1996
and the timing of certain maintenance projects contributed to these reductions.

                                 Page 11 of 17

<PAGE>

ENGINEERED PRODUCTS

         The Registrant's engineered products segment includes Metex Corporation
and AFP  Transformers,  Inc. The operating  results of the  engineered  products
segment are as follows:

                               Three Months                 Nine Months
                             Ended September 30,        Ended September 30,
                             -------------------        -------------------

(In thousands)                1997       1996           1997         1996
                              ----       ----           ----         ----

Net Sales                    $8,488    $ 10,336        $ 27,692     $32,369
                             ======    ========        ========     =======

Cost of Sales                $6,020    $  7,617        $ 19,919     $23,962
                             ======    ========        ========     =======

Selling, General and
 Administrative Expenses     $1,695    $  1,858        $  5,271     $ 5,580
                             ======    ========        ========     =======

Income from Operations       $  773    $    861        $  2,502     $ 2,827
                             =======   ========        ========     =======



         Net sales of the engineered  products segment decreased  $1,848,000 and
$4,677,000,  respectively  for the three and nine month periods ended  September
30, 1997 versus such  results of the  corresponding  prior year  periods.  These
decreases  from the prior year's  record  revenues are  primarily  the result of
increased price competition and declining worldwide automotive sales.

         Cost of sales as a percentage of net sales  decreased by  approximately
3% and 2% for the  three  and nine  month  periods  ended  September  30,  1997,
respectively, versus the corresponding periods in 1996. These decreases were due
to continued management focus on cost containment as well as product mix.

         Selling, general and administrative expenses of the engineered products
segment decreased  $163,000 and $309,000,  respectively,  during the quarter and
nine month periods ended  September 30, 1997 versus such costs of the comparable
1996 periods.  These reductions are principally due to reduced selling expenses,
primarily salary and salary related expenses.


                                 Page 12 of 17

<PAGE>

ANTENNA SYSTEMS

         The operating results of the antenna systems segment are as follows:

                                   Three Months              Nine Months
                                 Ended September 30,      Ended September 30,
                                 -------------------      -------------------

(In thousands)                     1997      1996         1997       1996
                                   ----      ----         ----       ----

Net Sales                         $5,182    $ 4,430     $15,620     $ 13,097
                                  ======    =======     =======     ========

Cost of Sales                     $3,605    $ 3,997     $11,829     $ 11,476
                                  ======    =======     =======     ========

Selling, General and
  Administrative Expenses         $1,135   $  1,193    $  3,264     $  3,653
                                  ======   ========    ========     ========

Income (Loss) from Operations     $  442  ($    760)   $    527    ($  2,032)
                                  ======= ==========   =========   ==========

         Net sales of the  antenna  systems  segment  increased  $752,000 or 17%
during the third  quarter and  $2,523,000 or 19% for the nine month period ended
September  30, 1997  versus  such sales  generated  during the  respective  1996
periods.  The 1996  sales  levels  were the  result of  significant  operational
problems that included  manufacturing  output well below planned levels in spite
of available  backlog to ship.  Actions  initiated by senior  management in 1996
increased the sales volume in the second half of 1996 to a level consistent with
the nine months ended September 30, 1997.

         Cost of sales  as a  percentage  of net  sales  decreased  21% and 12%,
respectively,  during the three and nine month periods ended  September 30, 1997
from the corresponding 1996 periods principally due to the continued increase in
productivity associated with higher shipment levels.

         Selling,  general  and  administrative  costs  of the  antenna  systems
segment decreased approximately $58,000 and $389,000,  respectively,  during the
current quarter and year-to-date  periods ended September 30, 1997,  versus that
of the  corresponding  prior year periods.  This reduction is principally due to
reduced salary and salary related expenses.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  ("G&A")  expenses not associated  with the
manufacturing  operations  decreased  by $26,000 and  $495,000 for the three and
nine month periods ended  September  30, 1997,  respectively  versus that of the
same periods in 1996 principally due to lower salary and related expenses.


                                 Page 13 of 17

<PAGE>
OTHER INCOME AND EXPENSE

         The  components  of  other  income  and  expense  in  the  accompanying
consolidated statements of income are as follows:
<TABLE>
<CAPTION>

                                               Three Months                Nine Months
                                            Ended September 30,         Ended September 30,
                                            -------------------         -------------------
                                           1997           1996          1997          1996
                                         ---------      --------      ----------    ----------

<S>                                       <C>           <C>           <C>           <C>       
Gain on sale of real estate assets        $144,614      $341,590      $2,966,014    $3,954,439

Loss from equity investments               (25,650)            -        (238,155)            -

Other                                        1,815         8,907          38,326      (561,034)
                                          --------      --------      ----------    -----------

                                          $120,779      $350,497      $2,766,185    $3,393,405
                                          ========      ========      ==========    ==========
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 1997 the  Registrant's  current  liabilities  exceeded
current assets by approximately $8.9 million.  This shortfall in working capital
results from  financing the purchase of long-term  assets  utilizing  short-term
borrowings and from the classification of current mortgage  obligations  without
the benefit of a corresponding current asset for such properties.  Management is
confident  that through  cash flow  generated  from  operations,  together  with
borrowings  available  under the line of credit  discussed below and the sale of
select assets, all obligations will be satisfied as they become due.

         Effective  September  30,  1997,  the  Registrant  amended its existing
Revolving  Credit Agreement  ("Credit  Agreement") with two banks to provide for
both a $7 million  term loan ("Term  Loan") and a $40 million  revolving  credit
facility  ("Revolver") and converted $7 million of amounts outstanding under the
Revolver  to  borrowings  under the Term  Loan.  Under  the terms of the  Credit
Agreement,  the Registrant will be provided with eligibility  based upon the sum
of (i) 50% of the aggregate annualized and normalized year-to-date net operating
income of eligible  properties,  as defined,  capitalized  at 11.5% and (ii) the
lesser of $12 million or the sum of 75% of eligible accounts  receivable and 50%
of  eligible  inventory,  as  defined.  Eligibility  is also  limited by amounts
outstanding  under  the Term  Loan.  At  September  30,  1997  the  Registrant's
eligibility under the Revolver was $40 million,  based upon the above terms. The
Credit  Agreement also contains  certain  financial and  restrictive  covenants,
including minimum consolidated equity,  interest coverage, debt service coverage
and capital  expenditures  (other than for real  estate).  Borrowings  under the
Revolver, at the Registrant's option, bear interest at Prime or LIBOR plus 1.75%
while  borrowings  under the Term Loan bear  interest at 90 day LIBOR plus 1.4%.
The Term Loan is payable in quarterly principal  installments of $350,000,  with
final  payment  on  September  30,  2002.  Effective  September  30,  1997,  the
Registrant entered into an interest-rate  swap agreement to effectively  convert
its floating  rate term loan to a fixed rate basis,  thus reducing the impact of
interest  rate  changes  on  future  expense.  Under  the  swap  agreement,  the
Registrant  agreed to exchange with the  counterparty  (a  commercial  bank) the
difference   between  the  fixed  and  floating  rate  interest   amounts.   The
differential to be paid or received on the interest rate swap is recognized over
the term of the agreement as an adjustment to interest  expense.  The fair value
of  the  swap  agreement  is not  recognized  in the  financial  statements.  At
September  30, 1997,  approximately  $34.5  million was available to be borrowed
under the Revolver.

                                 Page 14 of 17

<PAGE>

         The Registrant has undertaken the completion of  environmental  studies
and/or  remedial  action at Metex'  two New Jersey  facilities  and has filed an
action against certain insurance carriers seeking recovery of costs incurred and
to be incurred in these  matters.  Based upon the advice of counsel,  management
believes  such  recovery is probable  and  therefore  should not have a material
effect on the liquidity or capital  resources of the  Registrant.  However,  the
ultimate  outcome of litigation  cannot be predicted.  To date  settlements have
been  reached with several  carriers in this matter.  See Notes to  consolidated
financial statements.

         At September  30, 1997 and December 31, 1996 a total of $2.9 million in
anticipated   insurance   recoveries  has  been  recorded  in  the  accompanying
consolidated financial statements and is included in other assets. Additionally,
in  1995  the  Registrant  received  approximately  $4.1  million  of  insurance
recoveries.  The remaining balance of $2.9 million at September 30, 1997 (from a
total of $7 million) is in dispute  with the  Registrant's  insurance  carriers.
Management  believes that  recoveries in excess of the amounts  reflected in the
accompanying   consolidated  financial  statements,   are  available  under  the
insurance  policies  but have  not been  recorded.  There  can be no  assurance,
however, that the Registrant will prevail in its efforts to obtain amounts at or
in excess of the estimated recoveries.

         The  cash  needs of the  Registrant  have  been  satisfied  from  funds
generated by current operations and additional  borrowings.  It is expected that
future operational cash needs will also be satisfied from ongoing operations and
additional  borrowings  on the Revolver.  The primary  source of capital to fund
additional  real  estate  acquisitions  will come from the sale,  financing  and
refinancing of the  Registrant's  properties and from the third party  mortgages
and purchase money notes obtained in connection with specific acquisitions.

         In  addition  to  the  acquisition  of  properties  for   consideration
consisting of cash and mortgage financing  proceeds,  the Registrant may acquire
real  properties  in  exchange  for  the  issuance  of the  Registrant's  equity
securities.  The Registrant may also finance  acquisitions of other companies in
the future  with  borrowings  from  institutional  lenders  and/or the public or
private offerings of debt or equity securities.

         Funds of the  Registrant in excess of that needed for working  capital,
purchasing real estate and arranging  financing for real estate acquisitions are
invested by the  Registrant in corporate  equity  securities,  corporate  notes,
other financial instruments, certificates of deposit and government securities.

BUSINESS TRENDS

         Total  revenues of the  Registrant  decreased  $2,485,000 or 4% for the
first nine months of 1997 versus such results of the comparable 1996 period. Net
income  for the  first  nine  months of 1997 was  $6,144,000  or $1.15 per share
versus $3,833,000 or $.69 per share during the same period in 1996. The increase
in net  income  is  primarily  attributable  to  the  registrant's  real  estate
operations and to a significant turnaround in the antenna systems segment.

         The results of the  Registrant's  real estate  operations  reflect a 2%
decrease in revenues for the first nine months of 1997, primarily as a result of
revenues  associated  with  properties  sold in 1996.  Operating  profit of this
segment for the nine months ended September 30, 1997 increased $1,620,000 or 35%
over the prior year.  This segment was favorably  impacted by a 19% reduction in
mortgage  interest  expense  resulting  from the  repayment  of $6.1  million in
mortgage   indebtedness   during  the  last  12  months.   Continuing   mortgage
amortization  will continue to have a favorable  impact on these  operations and
will reduce  current  mortgage  obligations  to virtually zero in less than nine
years.

         The results of the Registrant's  engineered  products segment reflect a
14% decrease in revenues during the first nine months of 1997 versus  comparable
1996  results.  With the  continued  decrease  in world wide  automobile  sales,
management  is focused on new sales  opportunities  including  new  geographical
markets  for  its  existing   products  and  new   applications   for  its  core
technologies.  Operating  profits as a  percentage  of sales for the nine months
ended  September 30, 1997  increased over the prior year  principally  due to an
ongoing emphasis on cost reductions and productivity improvements.

                                 Page 15 of 17

<PAGE>

         The  results of the  Registrant's  antenna  systems  segment  reflect a
significant  turnaround from the prior year, which is primarily  attributable to
increased sales levels and to actions taken by senior management in 1996. 

FORWARD-LOOKING STATEMENTS

         This Form 10-Q contains certain  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors  created  thereby.  All  forward-looking  statements
involve risks and uncertainty,  including without  limitation,  general economic
conditions,  competition,  potential technology changes and potential changes in
customer  spending  and  purchasing   policies  and  procedures.   Although  the
Registrant   believes  that  the  assumptions   underlying  the  forward-looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the  forward-looking
statements included in this Form 10-Q will prove to be accurate. In light of the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the  Registrant or any other person that the  objectives  and
plans of the Registrant will be achieved.

PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ROSATELLI VS. UNITED CAPITAL CORP., ET AL.

In August 1996,  Dennis  Rosatelli,  the  Registrant's  former  Chief  Financial
Officer  commenced  an action in  Superior  court of New Jersey,  Law  Division,
Bergen  County,  seeking,  among  other  things,  payment  under his  employment
contract,  and  indemnification  for claims against him by the Internal  Revenue
Service and other  matters in  connection  with his tenure.  In March 1997,  Mr.
Rosatelli  amended his  complaint  to include  Bank of America  Illinois,  Metex
Corporation,  Kentile Inc.,  A.F.  Petrocelli and another  officer of Kentile as
additional  defendants.  The  Registrant  believes  that  as  a  result  of  Mr.
Rosatelli's  gross  negligence,  recklessness  and/or  willful  disregard of his
duties and responsibilities,  Mr. Rosatelli is not entitled to the recoveries he
seeks. Mr. Rosatelli's  employment was terminated by the Registrant in May, 1996
for cause. The matter has been removed to United States District Court, District
of New Jersey.  This action is in the early  stages of pretrial  discovery.  The
Registrant   intends  to   vigorously   defend  this  action  and  has  asserted
counterclaims  against Mr.  Rosatelli  for,  among other things,  the set off of
amounts by which he has damaged  the  Registrant  against  his claims  under his
employment contract.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

              (a)  Exhibit 27.  Financial Data Schedule
              (b)  Reports on Form 8-K
                   none

                                 Page 16 of 17

<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                 UNITED CAPITAL CORP.

Dated:  November 14, 1997        By: /s/ Anthony J. Miceli
                                     ---------------------
                                     Anthony J. Miceli
                                     Vice President, Chief Financial Officer and
                                     Secretary of the Registrant





                                 Page 17 of 17