UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION


                        Washington, D.C.  20549

                               FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the quarterly period ended December 26, 1998

          OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the transition period from ________ to _________

                    COMMISSION FILE NUMBER 0-17060

                            WLR FOODS, INC.
        (Exact name of Registrant as specified in its charter)

               Virginia                         54-1295923
          (State or other jurisdiction       (I.R.S. Employer
          of incorporation)                  Identification No.)

                             P.O. Box 7000
                       Broadway, Virginia  22815
              (Address including Zip Code of Registrant's
                     Principal Executive offices)

                            (540) 896-7001
         (Registrant's telephone number, including area code)

Indicate by cross 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 ()

The number of shares outstanding of Registrant's Common Stock, no par
value, at January 25, 1999 was 16,476,782 shares.

<PAGE>

                    PART 1.  FINANCIAL INFORMATION



Item 1.     Financial Statements
  
<TABLE>
                           WLR FOODS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>
(unaudited)                                        Thirteen weeks ended

In thousands, except per share data                DECEMBER 26,    DECEMBER 27,
                                                        1998           1997
<S>                                                   <C>            <C>
Net sales                                             $229,276       $247,683 
Cost of sales                                          191,486        232,278 
                                                      --------       -------- 

   Gross profit                                         37,790         15,405 
Selling, general and administrative expenses            22,696         23,033 
                                                      --------       -------- 
   Operating income (loss)                              15,094         (7,628)

Other expense:

   Interest expense                                      3,003          4,927 
   Sale of Goldsboro division                              118              - 
   Miscellaneous expense                                   325             84 
                                                      --------       -------- 
   Other expense                                         3,446          5,011 
                                                      --------       --------
Earnings (loss) before income taxes                     11,648        (12,639)
Income tax expense (benefit)                             4,426         (4,550)
                                                      --------       -------- 
Net earnings (loss) from continuing operation           $7,222        ($8,089)
Income from discontinued operations, net of t                -            207 
                                                      --------       -------- 
Total income from discontinued operations                    -            207 

Extraordinary charge on early extinguishment of                                     
 debt, net of tax                                         (954)             - 
                                                      --------       -------- 
Net income (loss)                                       $6,268        ($7,882)
                                                      ========       ========
<PAGE>

Basic earnings (loss) per common share,           
 continuing operations                                   $0.43         ($0.49)
Basic earnings per common share, discontinued                    
 operations                                                  -           0.01 
Basic loss per common share, early extinguishment 
 of debt                                                 (0.06)             - 
                                                      --------       -------- 
Total basic earnings (loss) per common share             $0.37         ($0.48)

Diluted earnings (loss) per common share,         
 continuing operations                                   $0.43         ($0.49)
Diluted earnings per common share,                              
 discontinued operations                                     -           0.01 
Diluted loss per common share, early              
 extinguishment of debt                                  (0.06)             - 
                                                      --------       -------- 
Total diluted earnings (loss) per common share           $0.37         ($0.48)

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                           WLR FOODS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited)                                        Twenty-six weeks ended

In thousands, except per share data                DECEMBER 26,   DECEMBER 27,
                                                      1998           1997
<S>                                                   <C>            <C>
Net sales                                             $467,216       $490,223 
Cost of sales                                          388,129        458,071 
                                                      --------       -------- 
   Gross profit                                         79,087         32,152 
Selling, general and administrative expenses            48,103         45,988 
                                                      --------       -------- 
   Operating income (loss)                              30,984        (13,836)

Other expense:
   Interest expense                                      7,889          9,233 
   Gain on sale of Goldsboro division                   (7,754)             - 
   Miscellaneous expense (income)                          303           (477)
                                                      --------       -------- 
   Other expense (income)                                  438          8,756 
                                                      --------       -------- 
Earnings (loss) before income taxes and           
 minority interest                                      30,546        (22,592)
Income tax expense (benefit)                            11,608         (8,134)
Minority interest in net earnings of              
 consolidated subsidiary                                     -             66 
                                                      --------       -------- 
Net earnings (loss) from continuing operations         $18,938       ($14,524)

Income from discontinued operations, net of       
 tax                                                       664          2,190 
Gain on disposal of discontinued operations,      
 net of tax                                             15,499              - 
                                                      --------       -------- 
Total income from discontinued operations               16,163          2,190 

Extraordinary charge on early extinguishment      
 of debt, net of tax                                   ($2,559)             - 
                                                      --------       --------
                                       3
<PAGE>

Net income (loss)                                      $32,542       ($12,334)
                                                      ========       ======== 

Basic earnings (loss) per common share,           
 continuing operations                                   $1.12         ($0.89)
Basic earnings per common share, discontinued     
 operations                                               0.97           0.13 
Basic loss per common share, early extinguishment 
 of debt                                                 (0.15)             - 
                                                      --------       -------- 
Total basic earnings (loss) per common share             $1.94         ($0.76)

Diluted earnings (loss) per common share,         
 continuing operations                                   $1.12         ($0.89)
Diluted earnings per common share,                
 discontinued operations                                  0.95           0.13 
Diluted loss per common share, early              
 extinguishment of debt                                  (0.15)             - 
                                                      --------       -------- 
Total diluted earnings (loss) per common share           $1.92         ($0.76)

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
                                       4
<PAGE>
<TABLE>
<CAPTION>
                           WLR FOODS, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS


Dollars in thousands

                                                    DECEMBER 26,      June 27,
                                                        1998           1998
ASSETS                                              (unaudited)

Current Assets
<S>                                                   <C>            <C>
   Cash and cash equivalents                              $197           $335 
   Accounts receivable, less allowance for
    doubtful accounts of $2,303 and $1,515              59,707         72,457 
   Inventories (Note 2)                                 99,630        128,031 
   Income taxes receivable                               1,002          1,002 
   Other current assets                                  1,433          1,870 
                                                      --------       -------- 
Total current assets                                   161,969        203,695 

Property, plant and equipment, net                     114,839        153,702 
Deferred income taxes                                    2,134         18,247 
Other assets                                             5,926          6,098 
                                                      --------       -------- 
TOTAL ASSETS                                          $284,868       $381,742 
                                                      ========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
   Current maturities of long-term debt (Note 5)        $3,560         $3,452 
   Excess checks over bank balances                     10,628          9,925 
   Trade accounts payable                               26,322         28,742 
   Accrued expenses                                     32,372         32,245 
   Deferred income taxes                                 6,784         10,636 
   Other current liabilities                             3,501              - 
                                                      --------       -------- 
   Total current liabilities                            83,167         85,000 

Long-term debt, excluding current maturities      
 (Note 5)                                               60,455        189,225 
Other liabilities and deferred credits                   3,727          3,626
                                       5
<PAGE>

Shareholders' equity:
   Common stock, no par value                           68,937         67,851 
   Additional paid-in capital                            2,974          2,974 
   Retained earnings                                    65,608         33,066 
                                                      --------       -------- 
   Total shareholders' equity                          137,519        103,891 
                                                      --------       -------- 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $284,868       $381,742 
                                                      ========       ======== 

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
                                       6
<PAGE>
<TABLE>
<CAPTION>
                           WLR FOODS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited)                                        Twenty-six weeks ended

Dollars in thousands                               DECEMBER 26,   DECEMBER 27,
                                                       1998           1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                   <C>            <C>
Net earnings (loss)                                    $32,542       ($12,334)
Adjustments to reconcile net loss to 
 net cash provided by (used in) operating activities:
Extraordinary charge on early extinguishment of                                     
 debt, net of tax                                        2,559              - 
Depreciation and amortization                           11,421         13,190 
(Gain) loss on sale of property, plant and        
 equipment                                                 142            (59)
Gain on sale of Goldsboro division                      (7,754)             - 
Gain on sale of discontinued operation                 (24,998)             - 
Deferred income taxes                                   12,261         (8,482)
Valuation allowance on assets held for sale              1,380              - 
Other, net                                                (284)           (72)
Change in operating assets and liabilities:
   Decrease in accounts receivable                       7,697          8,399 
   Decrease in inventories                              19,343         30,095 
   Decrease in other current assets                        345          3,925 
   Increase in long-term assets                           (682)        (1,454)
   Decrease in accounts payable                           (804)        (3,731)
   (Decrease) Increase in accrued expenses and    
     other                                               6,097         (3,083)
                                                      --------       -------- 
Net Cash Provided by Operating Activities               59,265         26,394 

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment             (15,032)       (10,756)
Proceeds from sale of discontinued operation            53,928              - 
Proceeds from sale of Goldsboro division                37,582              -
                                       7                            
<PAGE>

Proceeds from sale of property, plant and         
 equipment                                                  95          1,528 
                                                      --------       -------- 
Net Cash Used in Investing Activities                   76,573         (9,228)


CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of revolver and            
 long-term debt                                        218,113         10,000 
Payments on revolver and long-term debt               (353,386)        (5,825)
Financing costs paid                                    (1,767)             - 
Increase (decrease) in checks drawn not           
 presented                                                 703        (12,118)
Issuance of common stock                                   361            460 
Repurchase of common stock                                   -         (4,438)
                                                      --------       -------- 
Net Cash Used in Financing Activities                 (135,976)       (11,921)
                                                      --------       -------- 
Increase (Decrease) in Cash and Cash Equivalents          (138)         5,245 

Cash and Cash Equivalents at Beginning of         
 Fiscal Year                                               335            283 
                                                      --------       -------- 
Cash and Cash Equivalents at End of Period                $197         $5,528 
                                                      ========       ======== 

Supplemental cash flow information:                 
 Cash paid (refunded) for :
   Interest                                            $10,241         $7,444
   Income taxes paid (refunded)                          5,811         (3,113)


     The Company considers all highly liquid investments with maturities of 3
months or less at purchase to be cash equivalents.
                                       8
<PAGE>

Non-cash financing activities:

In fiscal 1999:
     The Company recorded 142,384 stock warrants at a value of $904,136 which
related to the February 1998 debt refinancing.

     The Company had 28,180 stock warrants expire at a value of $178,943 when
a portion of the February 1998 debt was repaid.

     The Company incurred an extraordinary charge on early extinguishment of
debt in the amount of $4.1 million for write-off of debt costs.

In fiscal 1998:
     The Company issued 102,296 shares of stock in the first quarter.

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
                                       9
<PAGE>

              Notes to Consolidated Financial Statements
                   WLR Foods, Inc. and Subsidiaries


1. Accounting Policies

The consolidated financial statements presented herein, include the
accounts of WLR Foods, Inc. and its wholly-owned subsidiaries. All
material balances and transactions have been eliminated in
consolidation. The consolidated balance sheet as of December 26, 1998,
and the consolidated statements of operations for the thirteen and
twenty-six weeks ended December 26, 1998 and  December 27, 1997, and
the consolidated statements of cash flows for the twenty-six weeks
ended December 26, 1998 and December 27, 1997 are unaudited. In the
opinion of management, all adjustments necessary for fair presentation
of such consolidated financial statements have been included.  Such
adjustments consisted only of normal recurring accruals and the use of
estimates.  Interim results are not necessarily indicative of results
for the entire fiscal year.

The consolidated financial statements and notes are presented in
conformity with the requirements for Form 10-Q and do not contain
certain information included in the Company's annual consolidated
financial statements and notes.

The Company's unaudited interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements included in the Annual Report to Shareholders for the
fiscal year ended June 27, 1998. In both, the accounting policies and
principles used are consistent in all material respects.

2. Inventories

A summary of inventories at December 26, 1998 and June 27, 1998
follows:

                                   (unaudited)
Dollars in thousands               December 26,        June 27,
                                       1998              1998
                                   ------------        --------
Live poultry and breeder flocks         $46,735         $58,947
Processed poultry and meat products      25,326          38,837
Packaging supplies, parts and other      13,421          15,879
Feed, grain and eggs                     14,148          14,368
                                       --------        --------
Total inventories                       $99,630        $128,031
                                       ========        ========
                                       10
<PAGE>

3. Earnings Per Share

The following is a  reconciliation between the calculation of basic
and diluted net earnings (loss)per share:

                              Second Quarter      Second Quarter 
                               December 26,        December 27,
                                  1998                 1997

Basic EPS Computation
Numerator - Net earnings (loss)    $6,268              ($7,882)

Denominator:
Common shares outstanding          16,466               16,298
Effect of outstanding stock
 warrants                             322                    -
                                   ------               ------
Basic weighted average common
 shares outstanding                16,788               16,298

Basic earnings (loss) per share     $0.37               ($0.48)
                                   ======               ======

Diluted EPS Computation
Numerator - Net earnings (loss)    $6,268              ($7,882)

Denominator:
Common shares outstanding          16,466               16,298
Effect of outstanding options          15                    -
Effect of outstanding stock
 warrants                             322                    -
                                   ------               ------
Diluted weighted average common
 shares outstanding                16,803               16,298

Diluted earnings (loss) per
 share                              $0.37               ($0.48)
                                   ======               ======


                              Year To Date          Year To Date
                              December 26,          December 27,
                                  1998                 1997

Basic EPS Computation
Numerator - Net earnings (loss)   $32,542             ($12,334)

Denominator:
Common shares outstanding          16,447               16,270
                                       11
<PAGE>

Effect of outstanding stock
 warrants                             297                    -
                                   ------               ------

Basic weighted average common
 shares outstanding                16,744               16,270

Basic earnings (loss) per share     $1.94               ($0.76)
                                   ======               ======

Diluted EPS Computation
Numerator - Net earnings (loss)   $32,542             ($12,334)

Denominator:
Common shares outstanding          16,447               16,270
Effect of outstanding options          10                    -
Effect of outstanding stock
 warrants                             515                    -
                                   ------               ------

Diluted weighted average common
 shares outstanding                16,972               16,270

Diluted earnings (loss) per
 share                              $1.92               ($0.76)
                                   ======               ======


4.  Sale of Assets

The Company completed the sale of its Cassco Ice & Cold Storage
subsidiary in July 1998 for net proceeds of approximately $54 million,
resulting in a gain of approximately $25 million ($15 million after
tax).  Income from operations in the current fiscal year was
approximately $1 million ($0.7 million after tax).  Both items
relating to the sale have been segregated from continuing operations
and reported as separate line items on the statement of operations. 
Based on a net  asset value calculation at the date of sale,
additional consideration from the seller may be received by the
Company.

In August 1998, the Company completed the sale of its Goldsboro, North
Carolina chicken complex.  Net proceeds of approximately $37 million
resulted in a gain of approximately $8 million ($5 million after tax).

In the second quarter of fiscal year 1999, the Company entered into an
agreement to sell its further processing plant in Monroe, NC.  The
Company has reduced the carrying value of the property by $1.4 million
to approximate its net realizable value of $4.3 million.  The
transaction is expected to be consummated in the third quarter of the
current fiscal year.
                                       12
<PAGE>

5.  Debt Refinancing

The Company refinanced its Secured Term Notes and Secured Revolving
Credit Notes as of November 20, 1998.  The new facility is a three-
year financing agreement that provides a total borrowing capacity of
$150 million.  The Agreement includes a $50 million term loan and a
$100 million revolving credit facility.  Both facilities have a
maturity date of November 20, 2001 and are secured by virtually all of
the Company's assets.  

Initially, interest on both the term loan and revolving credit
facility is based on the Company's choice of the London Inter-Bank
Offering Rate (LIBOR) plus an applicable margin of 250 basis points or
prime plus an applicable margin of 50 basis points.  At the end of
each quarter, the applicable margins may be reduced based upon Company
performance.  

At December 26, 1998, all $50 million of term loan borrowings were
based on a LIBOR rate of 5.04% plus the applicable margin of 250 basis
points for a total rate of 7.54%.  Revolving credit borrowings totaled
$12.7 million as of December 26, 1998, with $7.0 million tied to a
LIBOR rate of 5.55% plus the 250 basis point applicable margin for a
total rate of 8.05%.  The remaining $5.7 million in revolving credit
borrowings was based on prime plus 50 basis points, for a total rate
of 8.25%.

Principal payments of $1.0 to $1.5 million are required at the end of
each fiscal quarter beginning with the fourth fiscal quarter of 1999
for the Term Loan portion of the credit facility.  Additionally,
principal payments are required on the proceeds of asset sales in
excess of $1.0 million dollars annually and for substantial new
issuances of common stock.

The Company recorded an extraordinary non-cash charge to write off the
remaining unamortized debt issue costs of the prior credit facility
during the quarter ended December 26, 1998 of $1.5 million ($1.0
million after tax).  The charge is shown as an extraordinary item for
the early extinguishment of debt.  During the first quarter ended on
September 26, 1998, the Company recorded an extraordinary charge of
$2.6 million ($1.6 million after tax) for the early extinguishment of
debt resulting from the permanent reduction of its prior credit
facility due to the sale of its Cassco Ice and Cold Storage, Inc.
subsidiary and its Goldsboro, North Carolina chicken complex.  Total
year to date charges for the early extinguishment of debt are $4.1
million (2.6 million after tax).

The Company incurred approximately $1.8 million in costs to establish
the new credit facility, which have been capitalized and are being
amortized to interest expense over the life of the loan.
                                       13
<PAGE>

In connection with the refinancing, an interest rate swap that was
required under the prior credit facility was assigned from First Union
National Bank to the Bank of Montreal.  Accordingly, the swap has been
marked to market as of November 20, 1998, with a non-cash charge of
$0.6 million taken into interest expense.  The variable to fixed
interest rate swap agreement has a notional amount of $50.0 million,
and fixes the Company's variable interest rate at 6.29% through
January 4, 2000.  The related $0.6 million mark to market credit will
be amortized as an offset to interest expense over the remaining life
of the swap agreement.

The Company was in compliance with all covenants required by its new
credit facility as of December 26, 1998.
                                       14
<PAGE>

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


WLR Foods, Inc. (the Company) is a fully integrated poultry
production, processing and marketing business with operations in
Virginia, West Virginia, Pennsylvania and North Carolina.

Operating income for the second quarter of fiscal 1999 of $15.1
million was $22.7 million more than the same quarter last year.  The
improvement was primarily due to lower feed costs approximating $15
million.  Additionally, the Company benefited from an increase in
turkey pricing coupled with the continued recent trend of strong
chicken pricing, which resulted in a total benefit of $10.3 million
during the quarter.  Partially offsetting these gains were operational
inefficiencies related to the conversion and start up of the
Marshville chicken complex during the quarter of approximately $3
million.


Results of Operations

Net sales from continuing operations for the second quarter decreased
$18.4 million or 7.4% to $229.3 million, compared to $247.7 million
for the same quarter last year. Of this decrease, approximately $12
million is due to the closing of the distribution business in
Franconia, Pennsylvania during the first quarter.  Chicken revenues
for the quarter increased 1%, the result of a 6% increase in pricing,
offset by a 5% decrease in volume.  Turkey revenues decreased 7%, with
a 3% increase in price partially offsetting decreased volumes of 10%,
which were planned cutbacks that primarily resulted from the 
conversion of the Marshville complex from turkey to chicken in the
first quarter of this fiscal year. 

For the first six months of fiscal 1999, net sales from continuing
operations decreased $23.0 million or 4.7% to $467.2 million, compared
to $490.2 million for the same period last year.  Chicken revenues
increased 4%, the result of a 7% increase in pricing, offset by a 3%
decrease in volume.  Turkey revenues decreased 6%, with a 2% increase
in price partially offsetting decreased volumes of 8%.

For the second quarter of fiscal 1999, gross profits from continuing
operations increased $22.4 million to $37.8 million and gross profit
margins from continuing operations improved to 16.5% from 6.2% for the
same quarter last year.  Improving grain costs of approximately $15
million were the result of corn and soymeal average delivered prices
decreasing 19.6% and 40.1%, respectively. Chicken and turkey prices
for the quarter increased 6% and 3%, respectively, compared to pricing
                                       15
<PAGE>

for the same quarter last year, resulting in additional revenues of 
$5.7 million in chicken and $4.6 million in turkey.

Gross profits from continuing operations increased $46.9 million to
$79.1 million for the first six months of fiscal 1999. Gross profit
margins from continuing operations improved to 16.9% from 6.6% last
year.  The improvements in gross profits are primarily attributable to
decreases in grain costs of approximately $34 million.  In addition,
chicken and turkey prices for the six months increased 7% and 2%,
respectively, compared to the same period last year, resulting in
additional revenues of $14.8 million in chicken and $4.0 million in
turkey.

During the second quarter of fiscal 1999, selling, general and
administrative expenses, which included accrued employee incentives of 
$1.0 million, decreased $0.3 million when compared to the same quarter
last year.  For the first six months of 1999, selling, general and
administrative expenses, which included $1.6 million of accrued
employee incentives, increased $2.1 million when compared to the same
period last year.   

Interest expense decreased $1.9 million for the quarter and $1.3
million for the first six months, when compared to the same periods
last year.  These decreases are primarily the result of reduced
borrowings.

On August 14th, 1998 the Company sold its Goldsboro, North Carolina
chicken complex for approximately $37 million in net proceeds
resulting in a pre-tax gain of $7.8 million.  The net proceeds were
used to reduce long term debt.

The Company had net earnings from continuing operations of $7.2
million, or $0.43 per diluted share for the second quarter of fiscal
1999, compared with a net loss of $8.1 million, or $0.49 per diluted
share for the same quarter last year.  For the first six months of
fiscal 1999, net earnings from continuing operations were $18.9
million, or $1.12 per diluted share, versus a net loss of $14.5
million, or $0.89 per diluted share in the same period last year.

On July 31st, 1998 the Company sold its Cassco Ice and Cold Storage,
Inc., subsidiary for approximately $54 million in net proceeds.  While
there was no income from Cassco during the second quarter of this
fiscal year, the year-to-date Cassco income from discontinued
operations is $0.7 million and compares to $2.2 million for the six
months ended December 27, 1997.  The net proceeds from the sale of the
subsidiary were used to reduce long-term debt.  The gain on the sale
of $15.5 million, net of tax, occurred during the first fiscal quarter
of 1999 and has been specifically identified on the income statement
as a gain on the sale of discontinued operations.
                                       16
<PAGE>

Due to the permanent reduction of long term debt resulting from the
sale of the Cassco subsidiary and the Goldsboro complex, the Company
recorded an extraordinary after-tax charge of $1.6 million during the
first quarter of fiscal 1999, representing the write-off of
capitalized debt costs.

In conjunction with the November 20, 1998 debt refinancing, the
Company recorded an extraordinary after-tax charged of $1.0 
million during the second quarter of fiscal 1999, representing the
write-off of remaining capitalized debt costs pertaining to the prior
credit facility. 

Net income for the fiscal 1999 second quarter was $6.3 million, or
$0.37 per diluted share, and included an after-tax non-cash write-off
totaling $1.0, or $0.06 per diluted share, on the early extinguishment
of debt, versus a net loss of $7.9 million, or $0.48 per diluted share
for the same quarter last year.

For the fiscal 1999 six-month period, net income was $32.5 million, or
$1.92 per diluted share, and included: after-tax income of $0.7
million, or $0.04 per diluted share from the Company s Cassco Ice &
Cold Storage subsidiary; an after-tax gain of $15.5 million or $0.91
per diluted share on the sale of Cassco; and an after-tax, non-cash
write-off totaling $2.6 million, or $0.15 per diluted share, on the
early extinguishment of debt, versus a net loss of $12.3 million, or
$0.76 per diluted share, which included after-tax income of $2.2
million, or $0.13 per diluted share from Cassco, for the same period
last year.


Financial Condition and Liquidity

Accounts receivable and total inventory at the end of the first six
months of fiscal 1999 were $12.8 million and $28.4 million lower,
respectively, when compared to the end of fiscal year 1998.  Live and
processed inventories decreased $12.2 million and $13.5 million,
respectively.  The decrease in live inventories was primarily due to
lower feed costs while the processed inventories decreased primarily
from the seasonal sale of turkey products.
 
Debt levels were reduced substantially during the first six months of
fiscal 1999, from $192.7 million at fiscal 1998 year-end to $64.0
million at the end of the first six months of fiscal 1999.  The
decrease of $128.7 million is the result of approximately $92 million
from the sales of Cassco Ice and Cold Storage, Inc. and the Goldsboro
complex, and from approximately $36.7 million in cash flow from
operations.
                                       17
<PAGE>

Capital Resources 

The Company's capital spending for the quarter was $6.9 million and
$15.0 million for the first six months of fiscal 1999.  The major
capital project during the first and second quarter was the conversion
of the Marshville, North Carolina complex from turkey to chicken,
which resulted in capital expenditures of $3.8 million for the second
quarter and $9.4 million for the six months.  The remaining capital
expenditures were primarily for replacements of existing equipment and
safety requirements.  

Depreciation expense was $4.8  million for the quarter and $9.7
million year-to-date.  Projected capital spending for fiscal 1999 is
expected to total $23 to $26 million.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use."  SOP 98-1
is effective for fiscal years beginning after December 15, 1998 and
provides guidance on accounting for the described costs.  SOP 98-1
should not have a material impact on our financial position, results
of operations or cash flows when adopted.

The Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information." 
The standard requires that companies report certain information about
operating segments in a complete set of financial statements and in
condensed financial statements of interim periods issued to
shareholders.  SFAS No. 131 is effective for fiscal years beginning
after December 15, 1997.  The Company does not believe the adoption of
this statement will have a significant impact on the financial
statements.

In June 1998, The Financial Accounting Standards Board (FASB) issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities."  SFAS is effective in fiscal year 2000.  We have not yet
determined the impact of the adoption on our financial statements;
however, we do not expect the impact to be material.

Company performance expectations or "forward looking statements"
expressed from time to time are always subject to the possible
material impact of any risks of the business.  These risks include
weather conditions impacting grain production and harvesting and live
growout of poultry; feed supplies and prices; supplies and selling
prices of poultry and competing meats; consumer preferences;
governmental and regulatory intervention in the export/import of
poultry; changes in the regulations governing production processes;
and fluctuations in the general business climate.
                                       18
<PAGE>

Year 2000 Update

The Company began addressing the Year 2000 issue in 1995 and elected
to replace its multiple financial and order management systems with
one set of integrated software from Oracle Corporation. An upgrade to
a newer release of the Oracle software that supports the Year 2000
should be completed during the third quarter of this fiscal year.  The
Company has assessed all personal computers and communication networks
and believes there are no significant Year 2000 problems in these
areas.  

A review of operational systems, including processing plants, feed
mills, warehouses and hatcheries has been performed.  This review has
resulted in a plan for minor upgrades or replacements of equipment. 
At the present time, management is not aware of any significant
operational problems resulting from Year 2000 related equipment.  

To ensure that WLR business with our vendors and customers will
continue without interruption in the new millennium, the Company began
assessing vendor and customer Year 2000 readiness by written
questionnaires in November of 1998.  Questionnaires were sent to
customers comprising a majority of our sales revenue and to all
significant vendors. To date, no problems have arisen with either
vendors or customers, but all responses have not yet been obtained. 
The Company will continue to monitor and request Year 2000 readiness
disclosures from its vendors and customers through out the remainder
of the year.  There can be no assurance that the systems of other
parties upon which the Company relies will be converted on a timely
basis.

In evaluating contingency plans, the Company has identified its live
production accounting as the area most likely to need a backup system
in case of Year 2000 problems.  The system is not deemed a critical
system in terms of operating procedures and operates independently
from the major Oracle operating systems.  The Company estimates that
the live production accounting system will be Year 2000 compliant by
October of 1999.  In the event of a system failure in the live
accounting area, the Company feel's that there is sufficient written
documentation to prepare the needed accounting information on a manual
basis.

The Company has a committee that meets regularly to discuss progress
and issues pertaining to the Year 2000.  Progress is reported on a
regular basis to the Board of Directors.
                                       19
<PAGE>

Item 3.   Quantitative and Qualitative Disclosures About Market
          Risk

Market risks relating to the Company's operations result primarily
from changes in interest rates and commodity prices.  To address these
risks, the Company enters into various hedging transactions as
described below.  The Company does not use financial instruments for
trading purposes and is not party to any leveraged derivatives.


Interest Rate Sensitivity

The Company hedges exposures to changes in interest rates on certain
of its financial instruments.  Under the terms of various term and
revolving credit loans, the Company enters into interest rate swap
agreements to effectively lock in a fixed interest rate for a portion
of these borrowings.  In addition, the Company enters into interest
rate cap agreements to effectively limit the Company's exposure to
increases in interest rates.

The table below provides information about the Company's derivative
financial instruments and other financial instruments that are
sensitive to changes in interest rates.  For debt obligations, the
table presents principal cash flows and related weighted average
interest rates by expected maturity dates.  For interest rate swaps,
the table presents notional amounts and weighted average interest
rates by expected (contractual) maturity dates.  Notional amounts are
used to calculate the contractual payments to be exchanged under the
contract.


                                   Expected Maturity Date
Liabilities:
Dollars in thousands           1999     2000     2001     2002
--------------------------     ----     ----     ----     ----
Liabilities:
Long-term debt, including
 Current Portion Fixed Rate    $183     $196     $202     $215
     Average interest rate     6.00%    6.00%    6.00%    6.00%

Variable Rate                  $1,042   $4,850   $5,850   $51,244
     Average interest rate     7.48%    7.51%    7.51%    7.69%

Interest Rate Derivatives
Dollars in thousands           1999     2000     2001     2002
--------------------------     ----     ----     ----     ----
Interest Rate Swaps
   Variable to Fixed           $0       $50,000  $0       $0
     Average pay rate          0.00     6.29%    0.00     0.00
     Average receive rate
      - USD 1 month Libor
                                       20
<PAGE>

Interest Rate Cap
     Average pay rate          $0.00    $75,000  $0.00    $0.00
     Average receive rate
      - USD 1 month Libor      0.00     6.50%    0.00     0.00


Liabilities:                            There-            Fair
Dollars in thousands           2003     after    Total    Value
--------------------------     ----     ------   -----    -----
Liabilities:
Long-term debt, including
 Current Portion Fixed Rate    $89      $144     $1,029   $1,029
     Average interest rate     6.00%    6.00%    6.00%

   Variable Rate               $0       $0       $62,986  $62,986      
Average interest rate          0.00%    0.00%    7.65%


Interest Rate Derivatives               There-            Fair
Dollars in thousands           2003     after    Total    Value
--------------------------     ----     ------   -----    -----
Interest Rate Swaps
   Variable to Fixed           $0       $0       $50,000  ($638)
     Average pay rate          0.00     0.00     6.29%
     Average receive rate
      - USD 1 month Libor

Interest Rate Cap
     Average pay rate          $0.00    $0.00    $75,000  $7
     Average receive rate
      - USD 1 month Libor      0.00     0.00     6.50%


Commodity Price Sensitivity

The Company is a purchaser of certain commodities, primarily corn and
soybeans.  The Company uses commodity futures for hedging purposes to
reduce the effect of changing commodity prices on a portion of its
commodity purchases.  The contracts that effectively meet risk
reductions and correlation criteria are recorded using hedge
accounting.  Gains and losses on hedge transactions are recorded as a
component of the underlying inventory purchase.

The following table provides information about the Company's corn,
soybean meal and other feed ingredient inventory and futures contracts
that are sensitive to changes in commodity prices.  For inventory, the
table presents the carrying amount and fair value at December 26, 1998.
For the futures contracts, the table presents the notional amounts in
bushels, the weighted average contract prices, and the total dollar
                                       21
<PAGE>

contract amount by expected maturity dates, the latest of which occurs
in December 1999.  Contract amounts are used to calculate the contractual
payments and quantity of corn and soybean meal to be exchanged under the
futures contracts.


On Balance Sheet Commodity Position
  and Related Derivatives

                                   Carrying       Fair
Dollars in thousands                Amount        Value
--------------------------         --------       -----
Corn, Soybean Meal and
 Other Feed Ingredient
 Inventory                         10,992         10,992

                                   Contractual    Fair
Related Derivatives                  Amount       Value
--------------------------         -----------    -----
Corn Futures Contracts
   Contract Volumes
    (100,000 bushels)                    58
   Weighted Average Price
    (per bushel)                       2.41         2.35
   Contract Amount (dollars
    in thousands)                    14,026       13,692
                                       22
<PAGE>

                      PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits 

               See attached Exhibit Index 

          (b)  Form 8-K 

               Reporting Date November 12, 1998.  Item Reported - Item
          5, Other Events.  WLR Foods, Inc. announced it had entered
          into a three year financing arrangement with Harris Trust
          and Savings Bank as agent for a syndicate of lenders to
          refinance the Company s existing debt.  The Company also
          announced plans to sell its Monroe, North Carolina further
          processing plant, and to consolidate its Monroe, North
          Carolina and Franconia, Pennsylvania further processing
          operations in Franconia.
                                       23
<PAGE>

                               SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report is signed this 9th day of February, 1999, by the
Registrant's principal financial officer who is also authorized by the
Registrant to sign on its behalf.



                                   WLR FOODS, INC.


                                     __/s/ Dale S. Lam__
                                   Dale S. Lam, Chief Financial
                                   Officer and duly authorized
                                   signator for Registrant
                                       24
<PAGE>

                             EXHIBIT INDEX


Exhibit No.         Description

  2.1               Form of Credit Agreement, dated as of
                    November 20, 1998

  2.2               Form of Revolving Credit Note, as of dated
                    November 20, 1998

  2.3               Form of Term Credit Note, dated as of
                    November 20, 1998

  27                Financial Data Schedule
                                       25
<PAGE>