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 ended March 31, 1997

           [ ] 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 1-8191

                               PORTA SYSTEMS CORP.
             (Exact name of registrant as specified in its charter)

           Delaware                                         11-2203988
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                   575 Underhill Boulevard, Syosset, New York
                    (Address of principal executive offices)

                                      11791
                                   (Zip Code)

                                  516-364-9300
                (Company's telephone number, including area code)

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

Yes _X_   No ___

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

        Common stock (par value $0.01) 2,191,702 shares as of May 5, 1997


                               Page 1 of 11 pages

<PAGE>

PART I.- FINANCIAL INFORMATION
Item 1- Financial Statements

                      PORTA SYSTEMS CORP. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                             (Dollars in thousands)
                                                        March 31,   December 31,
                                                          1997         1996  
                                                        --------     --------
                    Assets                            (Unaudited)  
Current assets:                                                    
  Cash and cash equivalents                             $  4,968     $  2,584
  Accounts receivable - trade, less                                
   allowance for doubtful accounts                        11,509       16,034
  Inventories                                              6,898        7,424
  Prepaid expenses                                           754          782
  Other receivable                                           254          531
                                                        --------     --------
         Total current assets                             24,383       27,355
                                                        --------     --------
   Property, plant and equipment, net                      5,019        5,422
   Deferred computer software, net                         1,406        1,676
   Goodwill, net                                          11,443       11,555
   Other assets                                            4,106        4,650
                                                        --------     --------
         Total assets                                   $ 46,357     $ 50,658
                                                        ========     ========
                                                                   
      Liabilities and Stockholders' Deficit                             
Current liabilities:                                               
   Convertible subordinated debentures                  $  2,079     $  2,096
   Zero coupon senior subordinated convertible notes      25,908         --
   Current portion of long-term debt                       1,000          750
   Accounts payable                                        3,686        6,056
   Accrued expenses                                        8,761        9,004
   Accrued interest payable                                  657          583
   Accrued commissions                                     2,110        2,708
   Accrued deferred compensation                           1,140        1,232
   Income taxes payable                                      780          780
   Short-term loans                                           47           31
                                                        --------     --------
         Total current liabilities                        46,168       23,240
                                                        --------     --------
                                                                   
Long-term debt                                            16,470       16,835
Zero coupon senior subordinated convertible notes           --         25,885
Notes payable net of current maturities                    3,084        3,084
Income taxes payable                                         802          802
Other long-term liabilities                                  484          653
Minority interest                                            788          863
                                                        --------     --------
         Total long-term liabilities                      21,628       48,122
Stockholders' deficit:                                             
   Preferred stock, no par value; authorized                       
    1,000,000 shares, none issued                           --           --
   Common stock, par value $.01; authorized                        
    40,000,000 shares, issued 2,224,490 and                        
    2,223,861 shares at March 31, 1997 and                         
    December 31, 1996, respectively                           22           22
   Additional paid-in capital                             36,562       36,561
   Foreign currency translation adjustment                (4,356)      (4,014)
   Accumulated deficit                                   (51,294)     (50,900)
                                                        --------     --------
                                                         (19,066)     (18,331)
   Treasury stock, at cost                                (2,066)      (2,066)
   Receivable for employee stock purchases                  (307)        (307)
                                                        --------     --------
         Total stockholders' deficit                     (21,439)     (20,704)
                                                        --------     --------
         Total liabilities and stockholders' deficit    $ 46,357     $ 50,658
                                                        ========     ========
                                                                  

          See accompanying notes to consolidated financial statements.
                               Page 2 of 11 pages

<PAGE>

                      PORTA SYSTEMS CORP. AND SUBSIDIARIES
                 Unaudited Consolidated Statements of Operations
                      (In thousands, except per share data)


                                                           Three Months Ended
                                                         ----------------------
                                                         March 31,     March 31,
                                                            1997          1996
                                                         --------      --------

Sales                                                    $ 12,480      $ 13,221
Cost of sales                                               8,466         8,883
                                                         --------      --------
  Gross profit                                              4,014         4,338

Selling, general and administrative expenses                2,587         3,412
Research and development expenses                           1,151           871
                                                         --------      --------
    Total expenses                                          3,738         4,283
                                                         --------      --------

    Operating income                                          276            55

Interest expense                                             (916)       (2,178)
Interest income                                                42             9
Other                                                         135          (151)
                                                         --------      --------
    Loss before income taxes, minority interest
    and extraordinary gain                                   (463)       (2,265)

Income tax expense                                            (14)          (13)
Minority interest                                              75           110
                                                         --------      --------
    Loss before extraordinary gain                           (402)       (2,168)

Extraordinary gain                                              8         3,033
                                                         --------      --------
Net income (loss)                                        $   (394)     $    865
                                                         ========      ========
Per share data:

    Loss before extraordinary gain                       $  (0.06)     $  (0.80)
    Extraordinary gain                                       0.00          1.15
                                                         --------      --------
     Net income (loss)                                   $  (0.06)     $   0.35
                                                         ========      ========
    Weighted average shares outstanding                     6,142         2,625
                                                         ========      ========


     See accompanying notes to unaudited consolidated financial statements.
                               Page 3 of 11 pages

<PAGE>

                      PORTA SYSTEMS CORP. AND SUBSIDIARIES
                 Unaudited Consolidated Statements of Cash Flows
                                 (In thousands)

                                                            Three Months Ended
                                                            -------------------
                                                            March 31,  March 31,
                                                              1997        1996  
                                                            -------     -------
Cash flows from operating activities:                                 
   Net income (loss)                                        $  (394)    $   865
   Adjustments to reconcile net income (loss)                         
     to net cash used in operating activities:                        
       Extraordinary gain                                        (8)     (3,033)
       Non-cash financing expenses                              241       1,109
       Depreciation and amortization                            802       1,005
       Amortization of discount on convertible                        
        subordinated debentures                                  10          31
       Minority interest                                        (75)       (110)
   Changes in assets and liabilities:                            
       Accounts receivable                                    4,525        (359)
       Inventories                                              802       1,077
       Prepaid expenses                                          28        (171)
       Other receivables                                       (223)       --
       Deferred computer software                               (13)        (33)
       Other assets                                             406        (587)
       Accounts payable, accrued expenses                             
        and other liabilities                                (3,393)     (1,261)
                                                            -------     -------
            Net cash provided by (used in)                            
             operating activities                             2,708      (1,467)
                                                                      
   Cash flows from investing activities:                              
       Proceeds from disposal of assets                               
        held for sale, net                                      500       6,793
       Capital expenditures                                     (27)       (159)
                                                            -------     -------
            Net cash provided by investing activities           473       6,634
                                                            -------     -------
   Cash flows from financing activities:                              
       Proceeds from long-term debt                             254       1,250
       Repayments of long-term debt                            (369)     (6,503)
       Proceeds from (repayments of) short term loans            16         (43)
                                                            -------     -------
            Net cash used in financing activities               (99)     (5,296)
                                                            -------     -------
   Effect of exchange rates on cash                            (698)        332
                                                            -------     -------
   Increase in cash and cash equivalents                      2,384         203
                                                                      
   Cash and equivalents - beginning of the year               2,584       1,109
                                                            -------     -------
   Cash and equivalents - end of the period                 $ 4,968     $ 1,312
                                                            =======     =======
   Supplemental cash flow disclosure:
       Cash paid for interest expense                       $   782     $   833
                                                            =======     =======
       Cash paid for income taxes                           $    34     $     6
                                                            =======     =======


     See accompanying notes to unaudited consolidated financial statements.
                               Page 4 of 11 pages

<PAGE>

                      PORTA SYSTEMS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Management's Responsibility For Interim Financial Statements Including 
        All Adjustments Necessary For Fair Presentation

     Management  acknowledges  its  responsibility  for the  preparation  of the
accompanying  interim  consolidated   financial  statements  which  reflect  all
adjustments, consisting of normal recurring adjustments, considered necessary in
its opinion for a fair statement of its consolidated  financial position and the
results of its operations for the interim period presented.  These  consolidated
financial  statements  should  be  read  in  conjunction  with  the  summary  of
significant  accounting policies and notes to consolidated  financial statements
included  in the  Company's  annual  report to  stockholders  for the year ended
December  31,  1996.  Results  for  the  first  three  months  of  1997  are not
necessarily indicative of results for the year.

Note 2: Inventories

     Inventories  are valued at the lower of cost or market.  Inventory costs at
March 31, 1997 have been computed using a standard cost system.  The composition
of inventories at the end of the respective periods is as follows:

                                          March 31, 1997    December 31,1996
                                          --------------    ----------------
                                                   (in thousands)
     Parts and components                    $4,796               $4,557
     Work-in-process                            764                  515
     Finished goods                           1,338                2,352
                                             ------               ------
                                             $6,898               $7,424
                                             ======               ======
                                                         
Note 3: Long-Term Contracts

     Accounts  receivable  include  approximately  $900,000 at March 31, 1997 in
excess  costs and related  profits  over  amounts  billed  relating to long-term
contracts  under  which  the  Company  provides  specialized  products  to major
international  customers.  Substantially  all such  amounts  are  expected to be
billed during the remainder of 1997.

Note 4: 6% Convertible Subordinated Debentures and
        Zero Coupon Senior Subordinated Convertible Notes

     As of March 31,  1997,  the Company had  outstanding  $2,079,000  of its 6%
convertible  Subordinated  Debentures due July 1, 2002 (the Debentures),  net of
original issue  discount  amortized to principal over the term of the debt using
the  effective  interest  rate  method,  of  $196,000.  The face  amount  of the
outstanding Debentures was $2,275,000 at March 31, 1997.

     Interest on the  Debentures is payable on July 1 of each year. The interest
accrued as of March 31,  1997  amounted  to  $458,000.  As of March 31, 1997 the
Company is in default under the provisions of the Debentures.


                               Page 5 of 11 pages

<PAGE>

Note 4: 6% Convertible Subordinated Debentures and
        Zero Coupon Senior Subordinated Convertible Notes (continued)

     As of March 31, 1997, the Company had exchanged  approximately  $33,800,000
principal  amount of the  Debentures,  net of  unamortized  discount and accrued
interest   expense  for  655,720  shares  of  the  Company's  common  stock  and
$25,932,000 of Notes.  As of March 31, 1997  $25,908,000  Notes are  outstanding
after the conversion of 24,000 shares to common stock.

     The exchange of the Debentures for the Notes and common stock was accounted
for as a troubled debt  restructuring  in accordance with Statement of Financial
Accounting  Standards No. 15. Since the future  principal and interest  payments
under the Notes is less than the  carrying  value of the  Debentures,  the Notes
were recorded for the amount of the future cash payments, and not discounted. In
addition, no future interest expense will be recorded on the exchanged Notes. As
a result of the exchange, the Company recognized an extraordinary gain of $8,000
and $3,033,000 for the three months ended March 31, 1997 and 1996, receptively.

Note 5: Long-Term Debt

     On March 31, 1997,  the Company's  long-term  debt consisted of senior debt
under its credit facility in the amount of  $17,470,000.  The credit facility is
secured by substantially  all of the Company's  assets.  All obligations  except
undrawn  letters of credit,  letter of credit  guarantees  and the  deferred fee
notes  bear  interest  at 12%.  The  Company  incurs a fee of 2% on the  average
balance  of  undrawn   letters  of  credit  and  letter  of  credit   guarantees
outstanding. In addition, the Company is obligated to pay a monthly facility fee
of $50,000 and the loan agreement requires a minimum quarterly amortized payment
of $250,000 commencing for the quarter ending June 30, 1997.

     Financial  debt  covenants  include an  interest  coverage  ratio  measured
quarterly, limitations on the incurrence of indebtedness, limitations on capital
expenditures, and prohibitions on declarations of any cash or stock dividends or
the repurchase of the Company's  stock.  As of March 31,1997,  the Company is in
compliance with the above covenants.


                               Page 6 of 11 pages

<PAGE>

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

     The  Company's  consolidated  statements  of  operations  for  the  periods
indicated below, shown as a percentage of sales, are as follows:

                                                      Three Months Ended
                                                            March 31,
                                                      -------------------
                                                      1997           1996
                                                      ----           ----
Sales                                                  100%           100%
Cost of Sales                                           68%            67%
Gross Profit                                            32%            33%
Selling, general and administrative expenses            21%            26%
Research and development expenses                        9%             7%
  Operating income                                       2%             0%
Interest expense - net                                  (7%)          (16%)
Other                                                    1%            (1%)
Minority interest                                        1%             1%
Extraordinary item                                       0%            23%
Net income (loss)                                       (3%)            7%
                                                             
     The  Company's  sales by product line for the periods  ended March 31, 1997
and 1996 are as follows:

                                                       Three Months Ended
                                                            March 31,
                                               --------------------------------
                                                     1997              1996
                                               --------------    --------------

Line connection/protection equipment*          $  6,795    54%   $  5,797    44%
OSS equipment                                     3,992    32%      5,900    44%
Signal Processing                                 1,603    13%      1,437    11%
Other                                                90     1%         87     1%
                                               --------------    --------------
                                               $ 12,480   100%   $ 13,221   100%
                                               ==============    ==============

* Includes sales of fiber  optics  products of $0 and  $452,000  for the quarter
ended March 31, 1997 and 1996, respectively.


                               Page 7 of 11 pages

<PAGE>

Liquidity and Capital Resources

     As of March 31,  1997,  the Company  continues  to incur net losses  before
extraordinary  gains.  The Company will be required to refinance or  restructure
certain  existing notes payable which become due on January 2, 1998 as discussed
in the following  paragraph.  This factor continues to raise  substantial  doubt
about the Company's  ability to continue as a going  concern.  Furthermore,  the
unaudited  consolidated financial statements do not include any adjustments that
might result from the inability of the Company to refinance or restructure  such
notes.

     At March 31, 1997 the Company had cash and cash  equivalents  of $4,986,000
compared with  $2,584,000 at December 31, 1996.  The Company's  working  capital
deficit  at March 31,  1997 was  $21,785,000,  compared  to  working  capital of
$4,100,000 at December 31, 1996. At March 31, 1997,  $25,908,000  of Zero coupon
convertible  subordinated  notes (the Notes),  which are due on January 2, 1998,
are  classified as current  liabilities.  At March 31, 1997 the Company does not
have  sufficient  resources  to pay the Notes when they  mature and it is likely
that it  cannot  generate  such cash from its  operations  or from its  existing
credit  facilities.  Although the Company is seeking to refinance or restructure
the  Notes,  no  assurance  can be  given  that it will be  successful  in these
efforts.  If the Company is unable to refinance or restructure  the Notes or the
holders of the Notes do not convert such Notes to common  stock,  the  Company's
liquidity may be severely impaired and the Company's  business may be materially
and adversely affected.

     At March 31,  1997,  the  Company's  long-term  debt to its senior  secured
lender,  Foothill  Capital  Corporation  ("Foothill"),  consisted  of  a  credit
facility in the amount of $17,470,000  of which  approximately  $15,900,000  and
$1,500,000  relates  to  the  term  loan  and  the  revolving  line  of  credit,
respectively.  The agreement provides for loan principal payments of $750,000 in
1997 and requires the Company to pay  additional  principal  payments if certain
"adjusted cash flow amounts",  as defined,  exceed certain amounts. In addition,
the Company is obligated to pay a monthly  facility fee of $50,000.  As of March
31, 1997,  the Company's  availability  under its  $2,000,000  revolving line of
credit is approximately $500,000.

     As of March 31, 1997, the Company had remaining  outstanding  $2,079,000 of
its 6% Debentures,  net of original issue discounts  amortized to principal over
the term of the debt using the effective interest rate method, of $196,000.  The
face amount of the outstanding Debentures was $2,275,000.

     Interest  on the 6%  debentures  is  payable  on July 1 of each  year.  The
interest accrued as of March 31, 1997 amounted to $458,000. As of March 31, 1996
the Company is in default under the provisions of the  Debentures.  Accordingly,
such debt has been classified as a current liability at March 31, 1997.


                               Page 8 of 11 pages

<PAGE>

Results of Operations

     The Company's  sales for the quarter ended March 31, 1997 were  $12,480,000
which decreased by $741,000 (6%) compared to the quarter ended March 31, 1995 of
$13,221,000. Sales of line connection/protection equipment increased by $998,000
from $5,797,000 for the 1996 quarter to $6,795,000 for the 1997 quarter.  Within
this product line,  sales of copper products  increased  $1,450,000  (27%). As a
result of the sale of the fiber optics  business  unit, the Company had no sales
of fiber optic  products at March 31, 1997 compared to $452,000  during the same
quarter of 1996. OSS sales decreased by $1,908,000 (32%) from $5,900,000 for the
quarter ended March 31,1996 to $3,992,000  for the quarter ended March  31,1997.
Signal  processing  sales  increased  for the  quarter  ended  March 31, 1997 by
$166,000 from $1,437,000 in the 1996 quarter  compared to $1,603,000 in the 1997
quarter. The increased sales relating the line  connection/protection and signal
processing  units  resulted  from the  availability  of funds  which  enabled to
Company to procure materials which was lacking during the first quarter of 1996.
These funds were made available as a result of the March 1996 amended  agreement
with Foothill.  The decline in the OSS sales  primarily  resulted from delays of
the installation of several OSS systems.

     Cost of sales for the quarter  ended March 31,  1997,  as a  percentage  of
sales,  increased  from the quarter  ended March 31, 1996 from 67% to 68%.  This
slight  increase  reflects  the  change in the  product  mix and  certain  fixed
expenses associated with the OSS business.

     Selling,  general and  administration  expenses decreased by $825,000 (34%)
from $3,412,000 to $2,587,000.  This reduction reflects the Company's efforts to
reduce costs and expenses, and the elimination of the expenses as related to the
fiber optics business unit.

     Research and development expenses increased by $271,000 (31%) from $871,000
to $1,142,000.  This increase in research and development  expenses results from
the  Company's  efforts  develop  new  products,  primarily  related  to the OSS
business.

     As a result of the foregoing,  the Company had operating income of $276,000
for the quarter ended March 31, 1997, as compared to operating income of $55,000
for the quarter ended March 31, 1996.  Operating income for the first quarter of
1996 was  negatively  affected by the fiber optics  operation  which was sold in
March 1996.

     Interest  expense  decreased  by  $1,262,000  from  $2,178,000  in  1996 to
$916,000  in 1997.  This  change is  attributable  primarily  to a  decrease  in
interest  expense  related  to the  exchange  of the  Company's  6%  Convertible
Subordinated  Debentures  and reduced  borrowing  due to the  repayments  to our
senior lender. In addition, during the quarter ended March 31, 1996, the Company
incurred  additional  interest  expense as a result of the  recognition  in that
period of certain deferred  borrowing costs related to its loans from its senior
lender.

     The Company  incurred a loss  before  extraordinary  gains of $402,000  and
$2,168,000  for  the  quarter  ended  March  31,  1997  and  1996,  receptively.
Primarily, the reduction in the loss reflects the elimination of the expenses as
related to the fiber optics business and the reduction of interest expense.


                               Page 9 of 11 pages

<PAGE>

Results of Operations (continued)

     In the first  quarter  ended  March 31,  1997 and 1996,  respectively,  the
Company recorded an $8,000 and $3,033,000 gain from the early  extingushment its
6% Convertible  Subordinated Debt as a result of the exchange of the 6% Debt for
Zero Coupon Notes and common stock.

     As the  result  of the  foregoing,  the  Company  generated  a net  loss of
$394,000,  $0.06 per share,  for the  quarter  ended  March 31,  1997 versus net
income of $865,000,  $0.07 per share,  for the quarter ended March 31, 1996. The
calculation of the weighted average shares, for the quarter ended March 31, 1997
and 1996,  assumes  the  conversion  of the Notes which are  considered  to be a
common stock equivalent.


                               Page 10 of 11 pages

<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.
     

                                                 PORTA SYSTEMS CORP.

     Dated May 8, 1997                           By /s/William V. Carney
                                                    --------------------
                                                    William V. Carney
                                                    Chairman of the Board

     Dated May 8, 1997                           By /s/Edward B. Kornfeld
                                                    ---------------------
                                                    Edward B. Kornfeld
                                                    Senior Vice President
                                                    and Chief Financial Officer


                               Page 11 of 11 pages