FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
(Mark One)
[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended   September 30, 1996 

OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
        SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to         

                         Commission file number    0-20227   

                                   Tracor, Inc.               
              (Exact name of registrant as specified in its charter)

            Delaware                                           74-2618088   
(State or other jurisdiction of                             (I.R.S. Employer 
 incorporation or organization)                            Identification No.)

                                 6500 Tracor Lane, 
                             Austin, Texas 78725-2000 
                    (Address of principal executive offices)
                                    (Zip Code)

                                   512/926-2800 
               (Registrant's telephone number, including area code)

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

Yes   X                 No      

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

        Indicate by check mark whether the registrant has filed all documents
        and reports required to be filed by Sections 12, 13 or 15(d) of the 
        Securities Exchange Act of 1934 subsequent to the distribution of 
        securities under a plan confirmed by a court.

Yes   X                 No      

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Common stock  24,653,580 shares

<PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>
  TRACOR
  CONDENSED CONSOLIDATED BALANCE SHEETS
  
                                                              September 30,     December 31,
                                                                  1996              1995
                                                              -------------     ------------
                                                               (Unaudited)        (Audited)
                                                             (in thousands, except share data)
<S>                                   ASSETS                     <C>               <C>
  Current assets:
     Cash and cash equivalents                                    $ 57,767          $ 59,478
     Accounts receivable                                           198,413           141,657
     Inventories                                                    13,903             4,695
     Prepaid expenses and other                                     13,294             7,988
     Deferred income taxes                                          32,316            15,916
     Net assets held for sale                                        3,787               -  
                                                                  --------          --------
        Total current assets                                       319,480           229,734
  
  Property, plant, and equipment, net                              113,576            85,760
  Goodwill, net                                                    225,086            99,813
  Other intangibles                                                 14,155            18,385
  Prepaid pension costs                                             16,393            23,107
  Deferred charges and other assets                                 45,566            10,657
                                                                  --------          --------
  Total assets                                                    $734,256          $467,456
                                                                  ========          ========
  
                  LIABILITIES AND SHAREHOLDERS' EQUITY
  
  Current liabilities:
     Accounts payable and accrued liabilities                     $148,288          $ 89,870
     Current portion of long-term debt                              22,938            10,735
                                                                  --------          --------
        Total current liabilities                                  171,226           100,605 
  
  Long-term debt, less current portion                             299,813           180,440
  Deferred revenue                                                  17,056            23,752
  Other long-term liabilities                                       33,461            25,694
  
  Shareholders' equity:
     Preferred stock, par value $.01 a share: 1,000,000 shares
        authorized; no shares issued or outstanding                     -                 - 
     Common stock, par value $.01 a share: 53,000,000 shares
        authorized; shares issued and outstanding: 24,643,180
        in 1996 and 13,172,154 in 1995, net of 1,553 shares in
        treasury in 1996                                               246               132
     Class A common stock, par value $.01 a share: 1,000,000 shares
        authorized; 978,458 shares issued and outstanding in 1995       -                 10
     Additional capital paid in                                    125,273            76,606
     Retained earnings                                              87,181            60,217
                                                                  --------          --------
        Total shareholders' equity                                 212,700           136,965
                                                                  --------          --------
  Total liabilities and shareholders' equity                      $734,256          $467,456
                                                                  ========          ========
  
  See notes to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>  
  TRACOR
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  (Unaudited)
  
  
  
                                                           Three Months Ended       Nine Months Ended
                                                              September 30,           September 30,
                                                           ------------------       -----------------
                                                             1996       1995         1996      1995
                                                           (in thousands, except per share amounts)
  
<S>                                                       <C>       <C>          <C>       <C>        
  Net sales                                                $255,994  $229,180     $752,413  $657,934
  Cost of sales                                             197,969   185,906      595,276   529,559
                                                           --------  --------     --------  --------
     Gross profit                                            58,025    43,274      157,137   128,375
  
  Selling, administrative, and general expenses              30,950    26,235       88,674    78,127
                                                           --------  --------     --------  --------
     Earnings before interest, income taxes, and
       other income                                          27,075    17,039       68,463    50,248
  
  Other income (expense)                                       (217)    1,051         (448)    1,024
  Interest expense, net                                       6,612     4,687       19,422    14,935
                                                           --------  --------     --------  --------
     Income before income taxes                              20,246    13,403       48,593    36,337
  
  Income taxes                                                8,940     5,734       21,629    15,615
                                                           --------  --------     --------  --------
  Net income                                               $ 11,306  $  7,669     $ 26,964  $ 20,722
                                                           ========  ========     ========  ========
  
  Net income per common and common equivalent share:
  
     Primary                                                   $.43      $.33        $1.10      $.93
                                                               ====      ====        =====      ====
     Fully diluted                                             $.43      $.33        $1.09      $.91
                                                               ====      ====        =====      ====
  
  See notes to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>  
  TRACOR
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)
  
                                                                     Nine Months Ended
                                                                       September 30,
                                                                     -----------------
                                                                                                                              
                                                                     1996             1995
                                                                     ----             ----
                                                                          (in thousands)
<S>                                                               <C>              <C>                              
  Operating activities:
     Net income                                                    $ 26,964         $20,722 
     Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation of property, plant, and equipment            13,280          10,418 
           Amortization of goodwill                                   4,179           2,703 
           Amortization of other intangibles                          4,246           4,253 
           Decrease in prepaid pension costs                          6,714           8,351 
           Decrease in debt issuance costs                            2,334           1,514 
           Decrease in deferred revenue                              (6,714)         (8,351)
           Gain on sale of property, plant and equipment                 -           (1,357)
           Change in operating assets and liabilities:
              Decrease in accounts receivable                         8,755           8,559 
              Increase in inventories and prepaid expenses           (4,997)           (228)
              Decrease in recoverable income taxes                       52           1,495 
              Decrease in accounts payable and
                 accrued expenses                                   (15,958)         (5,163)
              Decrease in other, net                                   (519)           (640)
                                                                   --------        -------- 
        Net cash provided by operating activities                    38,336          42,276 
  Investing activities:
     Purchases of property, plant, and equipment                    (11,172)         (7,410)
     Proceeds from sale of property, plant, and equipment            13,397           2,282 
     Acquisitions, net of cash acquired                            (166,020)        (13,637)
                                                                   --------        -------- 
        Net cash used in investing activities                      (163,795)        (18,765)
  Financing activities:
     Payments of long-term debt                                     (99,735)         (7,870)
     Proceeds from issuance of long-term debt                       180,000              -  
     Purchase of treasury stock                                          -              (32)
     Proceeds from stock offering, net                               48,224          17,897 
     Payment of debt issuance costs                                  (5,191)             -  
     Exercise of stock options and warrants                             450             167  
                                                                   --------        -------- 
        Net cash provided by financing activities                   123,748          10,162 
                                                                   --------        -------- 
        Increase (decrease) in cash and cash equivalents             (1,711)         33,673 
  
  Cash and cash equivalents at beginning of period                   59,478          24,152 
                                                                   --------        -------- 
  Cash and cash equivalents at end of period                       $ 57,767         $57,825 
                                                                   ========        ======== 
    
  See notes to unaudited condensed consolidated financial statements.
  
</TABLE>
<PAGE>
 TRACOR
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 1996
 
 Note A -- Basis of Presentation
 
 The accompanying unaudited condensed consolidated financial statements 
 of Tracor, Inc. (Tracor or the Company) have been prepared in 
 accordance with generally accepted accounting principles for interim 
 financial information and with the instructions to Form 10-Q and 
 Article 10 of Regulation S-X.  Accordingly, they do not include all of 
 the information and notes required by generally accepted accounting 
 principles for complete financial statements.  In the opinion of 
 management, all adjustments, consisting of normal recurring items, 
 considered necessary for a fair presentation have been included.  
 Operating results for the quarter and nine-month period ended 
 September 30, 1996, are not necessarily indicative of the results that 
 may be expected for the year ending December 31, 1996.  For further 
 information, refer to the Company's consolidated financial statements 
 and notes thereto included in the Company's Annual Report on Form 10-K 
 as of December 31, 1995.
 
 Note B -- Income Taxes
 
 The effective income tax rate for the quarter and nine-month period 
 ended September 30, 1996, is based on the expected annual rate for 
 federal, state, and foreign income taxes.
 
 Note C -- Income Per Common and Common Equivalent Share
 
 Primary and fully diluted net income per share amounts for the quarter 
 and the nine-month period ended September 30, 1996, are computed in 
 accordance with the treasury stock method using the weighted average 
 common shares outstanding and equivalents assuming the exercise of all 
 outstanding warrants and options for common shares.  The weighted 
 average common and common equivalent shares used in the fully diluted 
 calculation were 26,363,000 for the quarter and 24,940,000 for the 
 nine-month period ended September 30, 1996.  Equivalent shares used in the 
 primary calculation were not significantly different from the amounts
 used in the fully diluted calculation.
 
 Note D -- Acquisitions
 
    Cordant Acquisition 
 
 On September 26, 1996, Tracor purchased all of the outstanding shares 
 of Cordant Holdings, Inc. (Cordant), an employee-owned information 
 systems company.  The company focuses on the design, development, and 
 integration of information systems for a variety of applications, 
 including mail processing, records management, and CAD/GIS 
 (computer-aided design/geographic information systems).  The purchase 
 price of $63.5 million is subject to certain working capital 
 adjustments, and contingent payments up to an additional $15 million 
 based upon Cordant's performance in 1996 and the potential award of a 
 large contract. The acquisition was financed by the use of $32 million 
 of cash on hand and the issuance of two promissory notes totaling $31.5 
 million.  One promissory note in the amount of $5 million, subject to 
 adjustments for indemnification claims, is payable March 26, 1998.  If 
 the contingent payments discussed above do not occur, a portion of the 
 $26 million note may become payable on April 1, 1997, in an amount not to 
 exceed $5.3 million.  The remaining balance of this note is payable upon 
 the resolution of a former Cordant minority shareholder's lawsuit.  
 Both promissory notes are supported by irrevocable standby letters of 
 credit which are fully collateralized by cash escrow deposits.  The 
 promissory notes and the cash escrow deposits are classified as 
 long-term debt and other long-term assets, respectively.
 
 The acquisition has been accounted for using the purchase method, and, 
 accordingly, the purchase price, including transaction expenses ($63.7 
 million) and the liabilities assumed ($36.8 million), have been 
 allocated to the assets acquired ($44.1 million) based on a preliminary 
 estimate of their respective fair values at the date of acquisition. 
 This preliminary estimate is subject to change based on finalization of 
 certain fair value determinations.  Such fair value determinations are 
 not expected to have a material effect on the consolidated financial 
 position or results of operations of Tracor.  The resulting excess of 
 the purchase price over the preliminary estimate of the fair value of 
 the net assets acquired ($56.4 million) is being amortized over 25 
 years.
 
    AEL Acquisition
 
 On February 22, 1996, Tracor purchased all of the outstanding common 
 shares of AEL Industries, Inc. (AEL).  AEL designs and manufactures 
 sophisticated countermeasures, simulation, and radar-warning receiver 
 systems; installs and integrates electronic avionics equipment in 
 military and commercial aircraft; and provides state-of-the-art 
 antenna, microwave, and integrated circuit components.
 
 The purchase price, including acquisition expenses, was approximately 
 $103 million.  AEL's long-term indebtedness prior to the acquisition 
 totaled approximately $20 million, of which approximately $10 million 
 was retired and approximately $10 million was assumed by Tracor.  The 
 financing for the transaction and related expenses was obtained through 
 an increase of the Company's existing bank term credit facility and 
 from cash on hand.
 
 The acquisition has been accounted for using the purchase method, and, 
 accordingly, the purchase price ($103 million) and the liabilities 
 assumed ($68 million) have been allocated to the assets acquired ($105 
 million) based on a preliminary estimate of their respective fair 
 values at the date of acquisition.  This preliminary estimate is 
 subject to change based on finalization of certain fair value 
 determinations.  Several changes from initial estimates are described 
 below.  Further changes are not expected to have a material impact on 
 the consolidated financial position or results of operations of Tracor.  
 The resulting excess of the purchase price over the preliminary 
 estimate of the fair value of the net assets acquired ($66 million) is 
 being amortized over 30 years.
 
 In conjunction with the acquisition of AEL, Tracor has developed and is 
 executing a plan to exit certain non-strategic activities and product 
 lines of AEL, dispose of certain AEL properties which are excess 
 to the combined company, and to relocate the operations being performed 
 in the facilities to existing Tracor facilities.
 
 As of September 30, 1996, Tracor has completed the sale of the 
 Instruments Services Division (ISD), a division of AEL, and two 
 excess AEL properties resulting in net proceeds of approximately $13 
 million.  The fair value estimates established at the acquisition date 
 for these assets have been reduced by approximately $1.4 million.
 
 As part of the plan to exit non-strategic activities and based on the 
 completion of a market study initiated in conjunction with the 
 acquisition, Tracor has determined to exit the Optical Communications 
 Division (OCD) product line.  The fair value estimate assigned to this 
 division's net assets has been adjusted downward by approximately $2.8 
 million.
 
 The relocation and consolidation into other Tracor facilities of 
 operations previously performed at AEL facilities and the elimination 
 of certain corporate functions at AEL's headquarters were substantially 
 complete as of September 30, 1996.  Estimated liabilities of 
 approximately $6 million for employee severance, relocation costs, 
 facility closing-related costs, and other miscellaneous liabilities 
 were established at the date of acquisition of which approximately $3.4 
 million of cost has been incurred through September 30, 1996.  Initial 
 estimates of these liabilities have been increased by approximately 
 $500,000.
 
 Finally, Tracor has obtained the necessary information to finalize its 
 review of AEL's cost estimates to complete certain contracts which were 
 in loss positions at the date of acquisition.  Based on these reviews, 
 Tracor has increased the estimated liabilities for completion of these 
 contracts for conditions existing as of the date of acquisition by 
 approximately $5.9 million.
 
 The above revisions to fair value estimates of assets and liabilities 
 of approximately $10.6 million, net of a deferred tax asset increase of 
 approximately $4.3 million, have resulted in an increase to goodwill 
 related to the AEL acquisition of approximately $6.3 million at 
 September 30, 1996.
 
    Pro forma Operating Results
 
 The following net sales, net income, and net income per share are 
 presented on a pro forma basis, assuming the acquisitions of AEL and 
 Cordant had occurred on January 1, 1995 (in thousands, except per share 
 data):
                              
                                                    Nine-month
                                                   Period Ended
                                                   September 30.
                                               --------------------
                                                1996           1995
 
 Net sales                                      $855,818   $829,684
 Net income                                       14,992     18,475
 Net income per share fully diluted                  .62        .82
 
 The pro forma results are not necessarily indicative of the actual 
 results of operations that would have occurred had the acquisitions of 
 AEL and Cordant occurred on January 1, 1995, nor of future results.
 
    Westmark Acquisition
 
 On June 13, 1996, Tracor concluded the acquisition of substantially all 
 the assets of Westmark Systems, Inc. (Westmark), which primarily 
 consisted of Tracor stock and warrants and certain other real estate 
 holdings.  Westmark, the former parent company of Tracor, held all of 
 Tracor's Class A stock (978,458 shares), a Series B warrant to purchase 
 5,249,428 shares of Tracor common stock with an exercise price of $4.42 
 per share, and a Series C warrant to purchase 5,455,000 shares of 
 Tracor common stock with an exercise price of $7.36 per share.  Under 
 the agreement, which was approved by the shareholders of both companies 
 on June 13, 1996, Tracor exchanged 8,267,435 shares of common stock for 
 the assets.  Westmark liquidated concurrently with the closing by 
 distributing the Tracor shares to its shareholders.  The agreement 
 provided for a distribution of the Tracor shares through underwritten 
 secondary offerings of a maximum of one-half of the shares during the 
 first two years after the closing.  Accordingly, approximately 3.6 
 million shares were sold in a public offering concluded on 
 July 11, 1996.   See Note F.
 
 Note E -- Long-term Debt
 
 Concurrent with the AEL acquisition, Tracor amended and restated its 
 existing credit agreement (Amended Credit Agreement) increasing the 
 total credit available thereunder from $135 million to $270 million.  
 The Amended Credit Agreement consists of a $180 million term loan 
 facility, a $40 million revolving loan facility, and a $50 million 
 letters of credit facility.  Substantially all assets of Tracor and 
 certain domestic, wholly owned subsidiaries are pledged or mortgaged 
 under the Amended Credit Agreement, and all borrowings are guaranteed 
 by such subsidiaries. 
 
 The term loans are comprised of an $80 million A Term Loan, a $50 
 million B Term Loan, and a $50 million C Term Loan. The A Term Loan 
 facility is evidenced by promissory notes maturing October 31, 1999, 
 requiring quarterly principal payments of approximately $5.3 million.  
 The B Term Loan facility is evidenced by promissory notes maturing 
 October 31, 2000, requiring quarterly payments of $133,333 through and 
 including October 31, 1999, and quarterly payments of $12 million from 
 January 31, 2000, through October 31, 2000.  The C Term Loan facility 
 is evidenced by promissory notes maturing April 30, 2001, requiring 
 quarterly payments of $131,578 through October 31, 2000, and two 
 payments of $23,750,000 on January 31 and April 30, 2001. The revolving 
 loans facility is evidenced by promissory notes maturing December 31, 
 2000.  The letters of credit facility provides for the issuance of 
 letters of credit with expiration dates generally 18 months or less 
 from the date of issuance (automatically renewable unless a default 
 exists at the expiration date) but in any event not later than 
 December 31, 2000.
 
 The Company made scheduled payments of $5.3 million on the A Term Loan 
 facility, $133,333 on the B Term Loan facility and $131,578 on the C 
 Term Loan facility during the third quarter of 1996.  No borrowings 
 were made from the Company's revolving loan facility during the 
 quarter.
 
 Certain mandatory prepayments are also required, including the 
 prepayment of amounts equal to 100% of the net proceeds from any asset 
 sales, subject to certain exceptions, and 50% of annual excess cash 
 flow.  Such mandatory repayments are to be applied to equally and 
 ratably prepay the A, B, and C Term Loans based on the relative 
 principal amounts outstanding.
 
 Term loans under the A Term Loan facility and the revolving loans bear 
 interest at Tracor's option at either the lender's base rate plus 1 
 1/2% or the eurodollar rate plus 2 1/2%.  Loans under the B Term Loan 
 facility bear interest at Tracor's option at either the lender's base 
 rate plus 2% or the eurodollar rate plus 3%.  Loans under the C Term 
 Loan facility bear interest at Tracor's option at either the lender's 
 base rate plus 2 1/4% or the eurodollar rate plus 3 1/4%.  Interest on 
 base rate loans is payable quarterly, and interest on eurodollar loans 
 is payable at the end of the applicable interest period or every three 
 months in the case of interest periods in excess of three months.  A 
 commitment fee of .5% per annum is charged on the unused revolving 
 loans and letters of credit facility and is payable quarterly in 
 arrears.  Each letter of credit bears a total fee of 2 3/8% per annum 
 plus customary administrative charges.  At September 30, 1996, the 
 Company had outstanding letters of credit totaling $34.4 million 
 relating to commitments for performance on certain contracts with 
 foreign customers and as collateral on certain insurance policies.
 
 The Amended Credit Agreement contains covenants which, among other 
 things, impose limitations and restrictions on the incurrence of 
 additional indebtedness, capital expenditures, future mergers and 
 acquisitions, sales of assets, payment of dividends (limited to 30% of 
 net income for the prior year), and changes in control, as defined.  In 
 addition, Tracor is required to satisfy certain financial covenants and 
 tests relating to, among other matters, interest coverage, working 
 capital, leverage, and net worth.
 
 Interest expense is presented net of interest income of $1.5 million 
 for the quarter and $3 million for the nine-month period ended 
 September 30, 1996, compared to $800,000 for the quarter and $2 
 million for the nine-month period ended September 30, 1995.
 
 Effective October 11, 1996, the Amended Credit Agreement was further 
 amended.  See Note G.
 
 Note F -- Shareholders' Equity
 
 On July 11, 1996, Tracor concluded a public offering of 6,567,272 
 shares of its common stock at a price of $17.50 per share. Of the 
 shares sold, the Company sold 3,000,000 shares and certain former 
 shareholders of Westmark sold 3,567,272 shares.  The net proceeds to 
 the Company from the primary shares sold in the offering, approximately 
 $48.2 million, were used to complete the acquisition of Cordant on 
 September 26, 1996.
 
 Note G -- Subsequent Event
 
 On October 11, 1996, Tracor reached agreement with its bank lenders to 
 further amend the Amended Credit Agreement.  The amendment, effective 
 as of October 11, 1996, has the following major effects:
 
   Increases the revolving loans facility from $40 million to $60 
   million;
   
   Reduces the interest rate on the outstanding A Term Loan, revolving 
   loans, and letters of credit by .75% and provides for additional 
   reductions ranging from .25% up to 1.125% based on certain financial 
   tests.  Currently the financial test allows for an additional .25% 
   reduction for a total 1% reduction from the rate in effect prior to 
   the amendment.
   
   Reduces the interest rates on outstanding B and C Term Loans by 1%;
   
   Reduces the commitment fee on the letters of credit and revolving 
   loans facility by .125% up to .25% based on certain financial tests.  
   Currently the financial test allows for a .125% reduction in the 
   fee.
   
   Reduces mandatory repayments of outstanding loans required when 
   proceeds are obtained from sales of assets or equity instruments; 
   and
   
   Allows the Company to use the revolving loans facility to complete 
   acquisitions in certain situations.
 
 Item 2.  Management's Discussion and Analysis of Financial Condition 
 and Results of Operations
 
 Business Environment
 
 Approximately 87% of the products, systems, and services of Tracor, 
 Inc. and its subsidiaries (Tracor or the Company) are sold to the U.S. 
 government through direct contracts, primarily with agencies of the 
 U.S. Department of Defense (DOD), or through subcontracts with other 
 U.S. government contractors.  Beginning in the mid-1980s, the defense 
 industry in general was negatively impacted by the perceived reduction 
 of threats from the former Soviet Union and eastern European countries 
 and, more recently, by competing demands upon the federal budget.  
 While this has resulted in a U.S. defense budget that has decreased in 
 real dollars, adjusted for inflation, over the last decade, it has 
 recently begun to stabilize.  For the first time in many years, the 
 total U.S. defense budget increased in 1996, excluding inflation. A 
 major portion of the Company's DOD sales are funded by the operations 
 and maintenance segment of the defense budget in areas which are among 
 today's top DOD priorities.  This segment has declined less than other 
 segments of the budget as readiness priorities have emerged.  It is now 
 the largest segment of the defense budget and is projected to comprise 
 about one-third of the defense budget over the next decade.  The 
 electronic content of the operations and maintenance segment, as well 
 as the procurement portion of the budget, are expected to experience 
 modest increases over this same time frame.  Tracor's ability to 
 benefit from this upturn is enhanced by its acquisition of AEL.
 
 Budget reductions have also driven the DOD and other U.S. government 
 agencies to rapidly improve their operating efficiency. This, in turn, 
 has triggered a substantial increase in the demand for state-of-the-art 
 computer equipment and software systems and a major change in the 
 government's method for acquiring information technology, moving to 
 large government-wide acquisition contract vehicles.  Tracor's 
 September 26, 1996, acquisition of Cordant has strengthened Tracor's 
 position in the rapidly growing information technology market for both 
 DOD and nondefense customers.  Information technology represents the 
 fastest growing business area within Tracor.
 
 The contraction of the defense budget in recent years and the resulting 
 excess capacity and increase in competition for contracts among defense 
 companies has resulted in a significant consolidation in the industry.  
 Principally through several acquisitions, the Company has substantially 
 increased its revenue base and reduced combined overhead costs through 
 staff reductions, facilities consolidations, process improvements, and 
 the elimination of certain other duplicative costs.  These efficiencies 
 and increased revenue base have enhanced Tracor's cost competitiveness 
 in bidding on new contracts and recompetes of existing contracts. 
 Management is continuing to pursue its acquisition strategy and 
 believes the continuing consolidation within the defense industry will 
 result in opportunities to pursue additional selected acquisitions, 
 both large and small, which should allow the Company to continue to 
 expand its revenue base and further improve its cost-competitive 
 position.
 
 While the long-term impact of changes in the defense budget and the 
 industry consolidation cannot be predicted with certainty, management 
 believes the Company is well positioned to continue to leverage its 
 strengths and successes in the U.S. defense and intelligence 
 marketplaces and increase its ongoing diversification efforts into 
 foreign defense markets, nondefense U.S. government markets, and 
 selected commercial markets.
 
 Financial Condition
 
 Working capital was $148.3 million at September 30, 1996, up from 
 $129.1 million at December 31, 1995.  The ratio of current assets to 
 current liabilities was 1.9 at September 30, 1996, compared to 2.3 at 
 December 31, 1995.   Cash provided by operating activities decreased 
 compared to the prior year due primarily to costs associated with 
 consolidating AEL facilities with existing Tracor locations.  Increases 
 in program and spare parts inventories and payments of interest expense 
 further reduced cash provided by operations in the current year.  Cash 
 from operating activities in 1995 also included a tax refund of $1.5 
 million related to the preacquisition period of an acquired company.  
 Normal capital expenditures of $11.2 million and scheduled long-term 
 debt payments of $14 million were incurred during the nine-month 
 period.  Proceeds of approximately $13.4 million were received from the 
 sale of two properties and a product line obtained in the acquisition 
 of AEL, and $4 million of these proceeds was used to repay long-term 
 debt associated with one of the properties.  The proceeds of the 
 Amended Credit Agreement and cash on hand were used to finance the 
 acquisition of AEL, to retire approximately $10 million of debt assumed 
 in the acquisition, and to pay approximately $5 million of financing 
 costs.  Cash on hand was also used to complete two small acquisitions 
 with an aggregate purchase price of $6.3 million.  Net proceeds from 
 the sale of Tracor common stock totaled approximately $48.2 million and 
 were used to complete the acquisition of Cordant.
 
 No borrowings were made from the Company's $40 million revolving loan 
 facility during the quarter.  At September 30, 1996, the Company had 
 outstanding letters of credit of approximately $34.4 million leaving 
 $15.6 million available under its $50 million letter of credit 
 facility.  If the $50 million letters of credit facility should become 
 fully utilized, $20 million of the revolving loan facility, to the 
 extent then available, can be used for issuance of additional letters 
 of credit.  Existing letters of credit secure performance commitments 
 on certain international contracts and serve as collateral for certain 
 insurance policies.  In conjunction with the Cordant acquisition, 
 Tracor established an additional letters of credit facility with one of 
 its lenders.  Letters of credit totaling $31.5 million outstanding 
 under this facility support notes payable issued as consideration 
 in the acquisition and are fully collateralized by cash escrow deposits.
 
 At September 30, 1996, the Company had firm backlog, which includes 
 funded and unfunded contractual commitments, of $1 billion as compared 
 to $924 million at December 31, 1995.  Approximately 78% of firm 
 backlog represents contracts with agencies of the U.S. government or 
 its prime contractors, and about 78% is expected to be earned within 
 one year.  In addition, the Company's backlog of unexercised contract 
 options on U.S. government contracts was $1.6 billion at September 30, 
 1996.
 
 The Company's operations typically do not require large capital 
 expenditures, and there were no material capital commitments at 
 September 30, 1996.
 
 Except for available amounts under the Amended Credit Agreement's 
 revolving loans and letters of credit facilities, the Company's present 
 debt position somewhat limits its ability to obtain substantial 
 additional debt for operational purposes in the near future. However, 
 management believes existing cash, funds generated by continuing 
 operations, and the Amended Credit Agreement will provide sufficient 
 resources to allow the Company to meet its obligations, fund capital 
 requirements, and continue to pursue its business strategy.  Management 
 also believes it can obtain the necessary resources to pursue further 
 acquisitions in the ongoing U.S. defense industry consolidation.
 
 Results of Operations
 
 Quarter and Nine-Month Period Ended September 30, 1996, Versus Quarter 
 and Nine-Month Period Ended September 30, 1995
 
 The results of operations for the quarter and the nine-month period 
 ended September 30, 1996, include the operating results of AEL since 
 the date of acquisition, February 22, 1996.  AEL's results are not 
 included in the comparative prior periods of 1995. The acquisition of 
 Cordant was completed on September 26, 1996, and had no effect on the 
 results of operations for the quarter and the nine-month period.
 
 Sales increased 12% for the quarter and 14% for the nine-month period.  
 The addition of AEL operations resulted in sales increases of 10% for 
 the quarter and 9% for the nine-month period.  Excluding AEL 
 operations, increased sales in the quarter were realized on 
 intelligence and engineering contracts, and sales of chaff and 
 electronic countermeasures.  These increases were offset by decreases 
 in sales of test equipment and reduced deliveries of digital imagery 
 workstations.  Sales increases for the nine-month period resulted from 
 increased sales on intelligence contracts, increased deliveries of 
 digital imagery workstations, production of drones under the QF-4 
 contract, and work performed under new contracts for chaff and mine 
 detection and neutralization systems.
 
 Operating profits increased 55% for the quarter and 34% for the 
 nine-month period; 40% and 19%, respectively, of these increases were 
 due to the addition of AEL operations.  Earnings recorded by AEL 
 include $3.6 million due to a negotiated increase to the price of a 
 U.S. government contract for work performed prior to 1996. This item 
 represents an increase of $2.1 million in net income or $.08 in fully 
 diluted earnings per share.  Other increases in earnings for the 
 quarter and the nine-month period were attributable to sales on 
 intelligence, electronic countermeasures, and F-16 test set contracts.  
 Increased deliveries of digital imagery workstations and increased 
 profits on those deliveries resulted in additional increases in 
 earnings for the nine-month period.
 
 Other income recorded in the prior year included a $1.2 million gain 
 resulting from the sale of a building.
 
 Interest expense increased 41% for the quarter and 30% for the 
 nine-month period.  The increases are due to the additional senior term 
 debt borrowed in conjunction with the acquisition of AEL and the 
 increased amortization of debt issuance costs.  The increase in 
 interest expense for the nine-month period is less than the increase 
 for the quarter primarily due to higher investment interest income 
 during the first and third quarters of 1996.
 
 The effective tax rate increased from 43% in the prior year to 44% for 
 the quarter and 45% for the nine-month period due to an increase in 
 combined federal and state income tax rates.
 
 
<PAGE> 
Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

        2.1  Cordant, Inc. Plan of Reorganization and Merger.  
             Exhibit 3(a)(1) to Tracor's Form 8-K, dated September 26, 1996,
             is incorporated herein by reference.
        11.  Statement regarding computation of income per common
             and common equivalent share.
        27.  Financial Data Schedule

     (b) Tracor filed a Report on Form 8-K dated September 26, 1996, 
         during the quarter, reporting the acquisition of all issued 
         and outstanding stock of Cordant Holdings, Inc.  Financial 
         Statements and required pro forma information relating to 
         this acquisition will be filed on or before December 10, 1996.
<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.

                                    Tracor, Inc.


Date: November 14, 1996             By: /s/ Robert K. Floyd
                                       --------------------
                                       Robert K. Floyd
                                       Vice President and
                                       Chief Financial Officer