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                 March 31, 1999
                                ------------------------------------------------

                                       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 Company 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
--------------------------------------------------------------------------------
               (Company'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 Company (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  Company  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
                          5,010,147 shares outstanding
                              as of May 10, 1999.


                                  Page 1 of 18
<PAGE>

                     UNITED CAPITAL CORP. AND SUBSIDIARIES

                                     INDEX

                          PART I FINANCIAL INFORMATION
                                                                            PAGE
                                                                            ----

ITEM 1.   FINANCIAL STATEMENTS

          Consolidated Balance Sheets as 
          of  March 31, 1999 and December 31, 1998                             3

          Consolidated Statements of  Income for
          the Three Months Ended March 31, 1999 and
          1998                                                             4 - 5

          Consolidated Statements of Cash Flows for
          the Three Months Ended March 31, 1999 and
          1998                                                             6 - 7

          Notes to Consolidated Financial Statements                      8 - 12


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS                  12 - 17


                           PART II OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS                                                   18

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                    18

SIGNATURES                                                                    18

                                  Page 2 of 18

<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
          CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1999 (UNAUDITED)
                             AND DECEMBER 31, 1998
                                 (In Thousands)

ASSETS                                                     1999            1998
------                                                     ----             ----

CURRENT ASSETS:                                                                 
  Cash and cash equivalents                             $16,771           $8,154
  Marketable securities                                  13,083           14,290
  Notes and accounts receivable, net                      7,134            7,819
  Inventories                                             4,490            4,339
  Prepaid expenses and other current assets                 315              209
  Deferred income taxes                                     258                0
                                                        -------           ------
Total current assets                                     42,051           34,811
                                                        -------           ------

PROPERTY, PLANT & EQUIPMENT, net                          4,838            4,686
                                                                                
REAL PROPERTY HELD FOR RENTAL, net                       68,949           71,437

NONCURRENT NOTES RECEIVABLE                                 583              593

OTHER ASSETS                                              8,531           11,296
                                                                                
DEFERRED INCOME TAXES                                     3,118            3,289
                                                      ---------         --------
     Total assets                                      $128,070         $126,112
                                                      =========         ========

LIABILITIES AND STOCKHOLDERS' EQUITY                       1999             1998
------------------------------------                       ----             ----
                                                                                
CURRENT LIABILITIES:                                                            
  Current maturities of long-term debt                   $5,801           $5,875
  Current portion of  borrowings under credit facilities  1,400            1,400
  Accounts payable and accrued liabilities               10,698           10,821
  Income taxes payable                                    7,004            6,355
  Deferred income taxes                                       0              152
                                                         ------           ------
     Total current liabilities                           24,903           24,603
                                                         ------           ------
                                                                                
LONG-TERM LIABILITIES:                                                          
  Borrowings under credit facilities                      3,500            3,850
  Long-term debt                                         28,446           26,929
  Other long-term liabilities                            18,312           18,312
                                                         ------           ------
     Total liabilities                                   75,161           73,694
                                                         ------           ------
COMMITMENTS AND CONTINGENCIES                                                   
                                                                                
STOCKHOLDERS' EQUITY:                                                           
  Common stock                                               502             515
  Additional paid-in capital                               1,251           3,536
  Retained earnings                                       49,015          45,429
  Accumulated other comprehensive income, net of  tax      2,141           2,938
                                                          ------          ------
     Total stockholders' equity                           52,909          52,418
                                                          ------          ------
                                                                                
     Total liabilities and stockholders' equity         $128,070        $126,112
                                                        ========        ========

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

                                  Page 3 of 18
<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)
                     (In Thousands, Except Per Share Data)

                                                            1999           1998
                                                            ----           ----
REVENUES:
     Net sales                                            $7,653         $8,306
     Rental revenues from real estate operations           6,522          6,242
                                                          ------          -----

     Total revenues                                       14,175         14,548
                                                          ------         ------
COSTS AND EXPENSES:
     Cost of  sales                                        5,660          5,884
     Real estate operations-
          Mortgage interest expense                          603            693
          Depreciation expense                             1,367          1,399
          Other operating expenses                         2,008            711
     General and administrative expenses                   1,538          1,123
     Selling expenses                                        991            937
                                                          ------         ------

Total costs and expenses                                  12,167         10,747
                                                          ------         ------

Operating income                                           2,008          3,801
                                                          ------         ------

OTHER INCOME (EXPENSE):
     Interest income                                         310            395
     Interest expense                                       (163)          (223)
     Other income and expense, net                         4,001            177
                                                          ------         ------
Total other income                                         4,148            349
                                                          ------         ------

Income from continuing operations before income taxes      6,156          4,150

Provision for income taxes                                 2,570          1,736
                                                          ------         ------

Income from continuing operations                          3,586          2,414
                                                          ------         ------
                                  Page 4 of 18
<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
         FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (Continued)
                                  (UNAUDITED)
                     (In Thousands, Except Per Share Data)

                                                            1999           1998
                                                            ----           ----
DISCONTINUED OPERATIONS:
     Gain on disposal of discontinued operations,           
     net of tax provision of $3,700                           $0         $4,849
                                                            ----         ------

Income from discontinued operations, net of tax                0          4,849
                                                            ----         ------

Net income                                                $3,586         $7,263
                                                          ======         ======

BASIC EARNINGS PER COMMON SHARE:
     Income from continuing operations                      $.70           $.46
     Discontinued operations                                 .00            .92
                                                            ----           ----
     Net income per common share                            $.70          $1.38
                                                            ====          =====

DILUTED EARNINGS PER COMMON SHARE:
     Income from continuing operations                      $.70           $.45
     Discontinued operations                                 .00            .90
                                                            ----           ----
     Net income per common share assuming dilution          $.70          $1.35
                                                            ====          =====

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

                                  Page 5 of 18
<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)
                                 (In Thousands)

                                                            1999           1998
                                                            ----           ----

Cash Flows From Operating Activities:
     Net income                                           $3,586         $7,263
                                                          ------         ------

     Adjustments to reconcile net income to net cash
          provided by operating activities:
     Gain on disposal of investments in affiliates        (1,989)             0
     Gain on sale of discontinued operations, net of tax       0         (4,849)
     Purchase of trading securities                            0         (5,891)
     Proceeds from sale of trading securities                  0          5,966
     Depreciation and amortization                         1,664          1,604
     Loss from equity investments                              0            126
     Gain on sale of trading securities                        0            (75)
     Changes in assets and liabilities(A)                  4,619         (4,217)
                                                          ------         -------


          Total adjustments                                4,294         (7,336)
                                                          ------         -------

     NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   7,880            (73)
                                                          ------         -------

Cash Flows From Investing Activities:
     Proceeds from disposal of investments in affiliates   2,450              0
     Proceeds from sale of discontinued operations             0         16,000
     Acquisition of property, plant and equipment           (479)          (401)
     Investment in and advances to affiliates                (29)          (231)
                                                           -----         -------

     NET CASH PROVIDED BY INVESTING ACTIVITIES             1,942         15,368
                                                           -----         ------

Cash Flows From Financing Activities:
     Principal payments on mortgage commitments, 
          notes and loans                                 (1,657)        (1,257)
     Proceeds from mortgage commitments, notes and loans   3,100              0
     Net borrowings under credit facilities                 (350)        (4,950)
     Purchase and retirement of common shares             (2,298)        (1,740)
                                                          ------         -------

     NET CASH USED IN FINANCING ACTIVITIES                (1,205)        (7,947)
                                                          ------         -------

Net increase in cash and cash equivalents                  8,617           7,348

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD          8,154           5,250
                                                         -------         -------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD              $16,771         $12,598
                                                         =======         =======

                                  Page 6 of 18

<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (Continued)
                                  (UNAUDITED)
                                 (In Thousands)

                                                            1999           1998
                                                            ----           ----
Supplemental Disclosures of Cash Flow
     Information:
          Cash Paid During the Period For:
               Interest                                     $742           $908
               Taxes                                       1,730            828
                                                          ======          =====

Supplemental Schedule of Noncash Investing
     and Financing Activities:
          See Notes to Consolidated Financial Statements


(A) Changes in assets and  liabilities for the three months ended March 31, 1999
and 1998, are as follows:

Notes and accounts receivable, net                        $   684       $   707
Inventories                                                  (151)          404
Prepaid expenses and other current assets                    (106)         (134)
Deferred income taxes                                         170           (13)
Real property held for rental, net                          1,152        (1,911)
Noncurrent notes receivable                                    10            19
Other assets                                                2,333            23
Accounts payable and accrued liabilities                     (122)       (3,690)
Income taxes payable                                          649           439
Other long-term liabilities                                     0           (61)
                                                          -------       ------- 


                 Total                                    $ 4,619       ($4,217)
                                                          =======       =======

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

                                  Page 7 of 18
<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, as
amended,  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, 1998.

         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:

(In Thousands)                            March 31, 1999     December 31, 1998
                                          --------------     -----------------

Raw materials                               $2,187             $1,851
Work in process                                367                403
Finished goods                               1,936              2,085
                                            ------             ------
                                            $4,490             $4,339
                                            ======             ======

CONTINGENCIES
-------------

         The Company 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 Company 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.

                                  Page 8 of 18
<PAGE>

         Environmental  studies at the second facility indicate that remediation
may be  necessary.  Based  upon the  facts  presently  available,  environmental
experts  have  advised  the  Company  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
Company 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 Company as new or
additional  information in these matters becomes  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 Company  believes  that it is entitled to full defense and
indemnification  with respect to  environmental  investigation  and  remediation
costs under its  insurance  policies,  the  Company's  insurers have denied such
coverage. Accordingly, the Company 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  Company  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 Company  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.

         Amounts   recorded  as   anticipated   insurance   recoveries   in  the
accompanying Consolidated Financial Statements are in dispute with the Company'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  Company  will  prevail in its  efforts to obtain
amounts at or in excess of the estimated recoveries.

         In the opinion of management,  these matters will be resolved favorably
and such amounts,  if any, not recovered under the Company'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 Company. However, adverse decisions or events, particularly as to the merits
of the  Company's  factual and legal basis could cause the Company to change its
estimate of liability with respect to such matters in the future.

         The Company is involved in various other  litigation  and legal matters
which are being  defended  and handled in the ordinary  course of business.  See
Part II Other  Information  - Item 1.  Legal  Proceedings  for a  discussion  of
ROSATELLI VS. UNITED CAPITAL CORP., et al. None of these matters are expected to
result  in a  judgment  having  a  material  adverse  effect  on  the  Company's
consolidated financial position or results of operations.

                                  Page 9 of 18
<PAGE>
EARNINGS PER SHARE
------------------

The following table sets forth the computation of basic and diluted earnings per
share:

                                                               Three Months
                                                               Ended March 31,
                                                               ---------------

(In Thousands, Except Per Share Data)                        1999         1998
                                                             ----         ----

Numerator:
     Income from continuing operations                      $3,586        $2,414
                                                            ------        ------
Denominator:
     Denominator for basic earnings per
                share-weighted-average shares
                outstanding
                                                             5,096         5,250
Effect of dilutive securities:
     Employee stock options                                     44           139
                                                            ------        ------
     Denominator for diluted earnings per
                share-adjusted weighted-average
                shares and assumed conversions
                                                             5,140         5,389
                                                            ------        ------

Basic earnings per share                                    $  .70          $.46
                                                            ======        ======

Diluted earnings per share                                  $  .70          $.45
                                                            ======        ======

COMPREHENSIVE INCOME
--------------------

The Company's  comprehensive income consists of unrealized gains and losses from
investments   in   available-for-sale   securities.   The  components  of  other
comprehensive income are as follows:

                                                               Three Months
                                                               Ended March 31,
                                                               ---------------

(In Thousands)                                             1999           1998
                                                           ----           ----


Net income                                               $ 3,586        $ 7,263

Other comprehensive income, net of tax:
Unrealized holding losses, on
available-for-sale securities net of tax
benefits of $411 and $1, respectively
                                                            (797)            (3)
                                                         -------        -------

Comprehensive income                                     $ 2,789        $ 7,260
                                                         =======        =======

                                 Page 10 of 18
<PAGE>
BUSINESS SEGMENTS
-----------------

         The  Company  operates  through  two  business  segments:  real  estate
investment and management and engineered  products.  The real estate  investment
and  management  segment is engaged in the business of investing in and managing
real estate properties and the making of high-yield, short-term loans secured by
desirable properties.  Engineered products are manufactured through wholly-owned
subsidiaries  of the Company and primarily  consist of knitted wire products and
components and transformer products.

         Operating results of the Company's business segments are as follows:

                                                             Three Months
                                                             Ended March 31
                                                             --------------
(In Thousands)
                                                           1999           1998
                                                           ----           ----

Net revenues and sales-
    Real estate investment and management                $  6,522      $  6,242
    Engineered products                                     7,653         8,306
                                                         --------      --------

                                                         $ 14,175      $ 14,548
                                                         ========      ========

Operating income-
    Real estate investment and management                $  2,545      $  3,439
    Engineered products                                       286           800
                                                         --------      --------

                                                            2,831         4,239

General corporate expenses                                   (822)         (438)
Other income, net                                           4,147           349
                                                         --------      --------

         Income from continuing
              operations before income taxes             $  6,156      $  4,150
                                                         ========      ========


NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments
and Hedging  Activities"  ("SFAS No. 133"),  which  establishes  accounting  and
reporting  standards for derivative  instruments.  SFAS No. 133 requires that an
entity  recognize  all  derivatives  as  either  assets  or  liabilities  in the
statement of financial position and measure those instruments at fair value. The
statement  requires  that changes in the  derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset  related  results  on the  hedged  item  in the  income  statement.  This
statement is effective for fiscal years beginning after June 15, 1999 and cannot
be applied  retroactively to financial  statements of prior periods. The Company
is in the process of evaluating the accounting  and reporting  requirements  and
believes that SFAS No. 133 will not have a material  impact on the  consolidated
results of operations, financial position or cash flows.

                                 Page 11 of 18
<PAGE>
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  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
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
------------------------------------------

         Revenues  for the three  month  period  ended March 31, 1999 were $14.2
million, a decrease of $373,000 or 3% from comparable 1998 revenues. Income from
continuing  operations  during  this  period was $3.6  million or $.70 per basic
share versus $2.4 million or $.46 per basic share during the  comparable  period
in 1998. In 1998, the Company sold its antenna  business,  resulting in a pretax
gain from  discontinued  operations  of  approximately  $8.6 million or $.92 per
basic share on an after tax basis in the first  quarter of 1998.  Net income was
$3.6  million or $.70 per basic share as compared to net income of $7.3  million
or $1.38 per basic share for the same period in 1998.

REAL ESTATE OPERATIONS
----------------------

         Rental revenues from real estate operations increased by $280,000 or 4%
for the three months  ended March 31, 1999  compared to the same period in 1998.
The increase is primarily  attributable  to revenues  generated from  properties
acquired in 1998.

         Mortgage interest expense decreased $90,000 or 13% for the three months
ended March 31, 1999,  compared to the same period in 1998. This decrease is due
to lower mortgage interest expense on mortgages  refinanced in 1998 and 1999 and
continuing  mortgage   amortization,   including   repayments   associated  with
properties sold.

         Depreciation   expense  associated  with  rental  properties  decreased
$32,000 for the three months ended March 31, 1999 compared to the same period in
1998. This decrease is primarily due to reduced  depreciation expense associated
with properties sold in 1998.

         Operating  expenses  associated  with the management of real properties
increased $1.3 million for the quarter ended March 31, 1999 compared to the same
period  in 1998  principally  due to 1998  expenses  having  been  reduced  by a
non-recurring real estate tax abatement of approximately $1

                                 Page 12 of 18

<PAGE>
million.  The remainder of the increase was principally due to expenses incurred
for the maintenance of properties acquired in 1998.

ENGINEERED PRODUCTS
-------------------

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

                                                            Three Months
(In Thousands)                                             Ended March 31,
                                                           ---------------

                                                          1999            1998
                                                          ----            ----


Net Sales                                                $7,653           $8,306
                                                         ======           ======

Cost of Sales                                            $5,660           $5,884
                                                         ======           ======

Selling, General and
 Administrative Expenses                                 $1,707           $1,622
                                                         ======           ======

Income from Operations                                   $  286           $  800
                                                         ======           ======


         Net sales of the engineered  products segment decreased  $653,000 or 8%
for the three month  period  ended March 31, 1999 as compared to the same period
in 1998. This decrease is primarily  attributable to continued price competition
and declining worldwide automotive sales for knitted wire products.

         Cost of sales as a percentage of sales increased to 74.0% for the three
months ended March 31, 1999 from 70.9% in the corresponding period of 1998. This
increase is principally  due to  non-recurring  costs  associated with the labor
strike and subsequent  union  settlement,  start up operations in Mexico and the
product mix.

         Selling, general and administrative expenses of the engineered products
segment  increased  $85,000 or 5% during the quarter ended March 31, 1999 versus
the comparable 1998 period.  This increase is due to additional expenses focused
on  increasing  both  market  share and  future  sales and  non-recurring  costs
associated with the labor strike in the first quarter.

                                 Page 13 of 18
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------

         General  and   administrative   expenses   not   associated   with  the
manufacturing  operations increased by $384,000 for the three month period ended
March 31, 1999, versus the same period in 1998. This increase is principally due
to a one-time expense reduction in 1998 and an increase in professional fees.

OTHER INCOME AND EXPENSE
------------------------

         The  components  of  other  income  and  expense  in  the  accompanying
Consolidated Statements of Income are, as follows:

                                                            Three Months
    (In Thousands)                                         Ended March 31,
                                                           ----------------

                                                           1999      1998
                                                           ----      ----


     Gain on disposal of investments in affiliates        $1,989    $    0

     Gain on sale of real estate assets                    1,971       221

     Income (loss) from investment in affiliates               0      (126)

     Gain on sale of marketable securities                     0        75

     Other, net                                               41         7
                                                          ------    ------

                                                          $4,001    $  177
                                                          ======    ======


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         At  March  31,  1999,  the  Company's  cash and  marketable  securities
approximated  $30 million and working capital  exceeded $17 million.  Management
believes  that  the  real  estate  market  continues  to be  overvalued  and the
Company's recent  acquisitions have been limited to those select properties that
meet its financial requirements.  Management believes that the available working
capital  along with the $40  million of  availability  on the  revolving  credit
facility  discussed below, puts it in an opportune position to fund acquisitions
and  grow  the  portfolio  if and  when the  real  estate  market  is no  longer
overvalued.  The current  liabilities of the Company have historically  exceeded
its current assets principally due to the financing of the purchase of long-term
assets utilizing  short-term  borrowings and from the  classification of current
mortgage   obligations   without  the  corresponding   current  asset  for  such
properties.  Future  financial  statements  may reflect  current  liabilities in
excess of  current  assets.  Management  is  confident  that  through  cash flow
generated from operations, together

                                 Page 14 of 18

<PAGE>
with borrowings  available under the revolving  credit facility  discussed below
and the sale of select assets,  all  obligations  will be satisfied as they come
due.

         The Company's  portfolio of  available-for-sale  securities  had a fair
market value of approximately $13.1 million at March 31, 1999, reflecting pretax
unrealized holding gains of approximately $3.2 million.

         The Company's  Credit  Agreement  with two banks provides for both a $7
million  term loan ("Term  Loan") and a $40 million  revolving  credit  facility
("Revolver").  Under the terms of the  Credit  Agreement,  the  Company  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 March 31, 1999,  eligibility under the Revolver was $40 million,  based
upon the above  terms.  The Credit  Agreement  contains  certain  financial  and
restrictive covenants, including minimum consolidated equity, interest coverage,
debt service coverage and capital expenditures (other than for real estate). The
Company was in  compliance  with all  covenants  at March 31,  1999.  The Credit
Agreement also contains provisions which allow the lenders to perfect a security
interest in certain  operating and real estate assets in the event of a default,
as  defined in the  Credit  Agreement.  Borrowings  under the  Revolver,  at the
Company's  option,  bear  interest at the bank's  prime  lending  rate or at the
London  Interbank  Offered Rate ("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 the final  payment due on
September 30, 2002. The Revolver expires on January 15, 2000. At March 31, 1999,
there  were no amounts  outstanding  under the  Revolver  and $4.9  million  was
outstanding on the Term Loan.

         The Company has 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 Company
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.

         The Company 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  Company.  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--Contingencies.

         Amounts   recorded  as   anticipated   insurance   recoveries   in  the
accompanying Consolidated Financial Statements are in dispute with the Company'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  Company  will  prevail in its  efforts to obtain
amounts at or in excess of the estimated recoveries.

                                 Page 15 of 18
<PAGE>
         The cash needs of the Company have been satisfied from funds  generated
by current  operations  and  additional  borrowings.  It is expected that future
operational  cash needs and the cash required to repurchase the Company's common
stock will also be satisfied from existing cash balances, ongoing operations and
additional  borrowings  on the Revolver.  The primary  source of capital to fund
additional real estate  acquisitions and to make additional  high-yield mortgage
loans will come from existing funds, the sale,  financing and refinancing of the
Company's  properties  and from 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 Company may acquire real
properties in exchange for the issuance of the Company's equity securities.  The
Company 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.

         Repurchases  of the  Company's  common  stock will be made from time to
time in the open market at prevailing market prices and may be made in privately
negotiated transactions, subject to available resources. Funds of the Company in
excess of that needed for working capital,  purchasing real estate and arranging
financing for real estate  acquisitions are invested by the Company in corporate
equity securities, corporate notes, other financial instruments, certificates of
deposit and government securities.

BUSINESS TRENDS
---------------

         Total revenues of the Company were $14,175,000 for the first quarter of
1999, a decrease of $373,000 or 3% from the comparable  1998 period  principally
due to a decline in revenues from the  Company's  engineered  products  segment.
Income from continuing operations for this period was approximately $3.6 million
or $.70 per basic share  versus $2.4  million or $.46 per basic share during the
same period in 1998.

         The  results  of the  Company's  real  estate  operations  reflect a 4%
increase  in  revenues  for the first  three  months of 1999,  primarily  due to
revenues  generated from properties  acquired in 1998. Pretax income of the real
estate  operations  increased  approximately  $2.7  million  over the prior year
period.  This increase is principally due to increased gains on the sale of real
estate  assets and other real estate  investments  and lower  mortgage  interest
expense  principally  resulting  from the lower  interest cost  associated  with
mortgages refinanced in 1998. These amounts were partially offset by higher real
estate operating  expenses resulting from 1998 expenses having been reduced by a
non-recurring  real estate tax abatement of approximately $ 1 million.  Mortgage
amortization  will continue to have a favorable  impact on this segment and will
reduce current mortgage indebtedness to zero in less than eight years.

                                 Page 16 of 18
<PAGE>

         Revenues  for the  engineered  products  segment  decreased 8% from the
prior  year  principally  due to  continuing  price  competition  and  declining
worldwide  automobile  sales.  Operating  profit  from  this  segment  decreased
$514,000 primarily from the reduction in sales,  non-recurring  costs associated
with a labor  strike in the first  quarter,  start up  operations  in Mexico and
additional  selling,  general  and  administrative  expenses  focused on gaining
market share and increasing sales. Management remains committed to growing these
businesses and is aggressively  pursuing new sales opportunities,  including new
geographical markets for its existing products and new applications for its core
technologies.

YEAR 2000 CONVERSION
--------------------

         The Company currently  believes that its essential  processes,  systems
and business functions will be ready for the millennium transition and is taking
the necessary steps to accomplish this objective. The Company has undertaken the
implementation in its manufacturing  operations of a fully integrated Enterprise
Resource  Planning  (ERP)  software  package.   Although  the  ERP  package  was
implemented  for purposes other than  remediating  the Year 2000 issue,  the ERP
package is certified  as Year 2000  compliant.  As part of this  implementation,
which was  completed in December  1998,  the Company also  believes  that it has
identified and addressed all its related Year 2000 hardware issues.  The Company
believes that the costs, if any,  directly  associated with Year 2000 compliance
will not be material to its financial condition or results of operations.  Year
2000  issues  are not  significant  to the  Company's  real  estate  operations.
Substantially  all third parties  (banks,  suppliers,  customers)  for which the
Company has a business relationship are among the largest and most sophisticated
companies in the country and the Company is  providing  the data  necessary  for
these companies to evaluate their Year 2000 issues.

         The Company  believes that it has taken  reasonable  steps in preparing
for the Year 2000 issue,  but cannot  ensure that all of its Year 2000 issues or
those  of  its   significant   third  parties  will  be  resolved  or  addressed
satisfactorily  before the Year 2000 commences.  Any resulting  disruption could
have a material adverse impact on its business.

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,  interest  rates,  competition,  potential  technology  changes  and
potential changes in customer  spending and purchasing  policies and procedures.
Although   the   Company   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 Company or any other  person
that the objectives and plans of the Company will be achieved.

                                 Page 17 of 18
<PAGE>
PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Rosatelli vs. United Capital Corp.
----------------------------------

         In August 1996, Dennis Rosatelli,  the Company's former Chief Financial
Officer  commenced  an action in  Superior  Court of New Jersey,  Law  Division,
Bergen County ("Superior Court"), 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 compliant to include Bank of America  Illinois,  Metex
Corporation,  Kentile Inc.,  A.F.  Petrocelli and another  officer of Kentile as
additional defendants.  The Company 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 Company in May, 1996 for cause. The
matter was removed to United States  District  Court,  District of New Jersey in
October 1996. In March 1998 the U.S.  District  Court  dismissed  certain of Mr.
Rosatelli's  claims and  remanded  the  remainder of the action back to Superior
Court.  In May 1998, Mr.  Rosatelli  amended his complaint to include  Kentile's
assignee for the benefit of creditors as an  additional  defendant and to remove
the officer of Kentile  previously  named as a defendant  from this action.  The
material allegations of the complaint are unchanged. This action is in the early
stages of pretrial  discovery.  The Company  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 Company  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.



                                   SIGNATURES

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

                                                       UNITED CAPITAL CORP.

Dated:  May 10, 1999                                   By: /s/ Anthony J. Miceli
                                                           ---------------------
                                                           Anthony J. Miceli
                                                           Vice President,
                                                           Chief Financial 
                                                           Officer and Secretary
                                                           of the Company

                                 Page 18 of 18