SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


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

                 For the quarterly period ended June 30, 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 No. 1-4235


                                AMP INCORPORATED
               (Exact Name of Registrant as Specified in Charter)
                           
                        ********************************

      Commonwealth of Pennsylvania                         23-0332575
(State or Other Jurisdiction of Incorporation    IRS Employer Identification No.
         or Organization)

    Harrisburg, Pennsylvania                                   17105-3608
(Address of Principal Executive Offices)                       (Zip Code)

        Registrant's Telephone Number, Including Area Code (717) 574-0100

                        ********************************

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 [ ].

The number of shares of AMP Common Stock (without Par Value) outstanding at July
27, 1998 was 218,601,033 (excluding shares held in the treasury of the
Corporation, all of which are issued but not outstanding and are not entitled to
vote).

                                                    Includes an Exhibit Index.

                         AMP Incorporated & Subsidiaries

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

     The Consolidated Statements of Income for the three months and the six
months ended June 30, 1998 and 1997, the Consolidated Statements of Cash Flows
for the six months ended June 30, 1998 and 1997, and the Consolidated Balance
Sheets at June 30, 1998 and December 31, 1997, are presented below. See the
notes to these condensed consolidated financial statements at the end thereof.

           AMP Incorporated & Subsidiaries
          CONSOLIDATED STATEMENTS OF INCOME
                   (Unaudited)

                                       (dollars in thousands,
                                       except per share data)

                                       For the Three Months
                                          Ended June 30,

                                         1998           1997
                                     -----------    -----------
Net Sales ....................       $ 1,352,762    $ 1,468,005
Cost of Sales (See Note 2)....           978,184        995,617
                                     -----------    -----------
    Gross income .............           374,578        472,388
Selling, General and                                           
 Administrative Expenses      
     (See Note 2).............           284,157        283,105
                                     -----------    -----------
    Income from operations ...            90,421        189,283
Interest Expense .............            (7,078)        (8,964)
Other Deductions, net                                 
    (See Note 3) .............            (2,160)       (21,366)
                                     -----------    -----------
    Income before income taxes            81,183        158,953
Income Taxes .................            26,386         51,660
                                     -----------    -----------
Net Income ...................       $    54,797    $   107,293
                                     ===========    ===========
Per Share Amounts:
    Basic and Diluted Earnings 
      Per Share ..............              $.25           $.49   
    Cash Dividends............              $.27           $.26   
                                     ===========    ===========

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
                                                    
           AMP Incorporated & Subsidiaries
          CONSOLIDATED STATEMENTS OF INCOME
                   (Unaudited)

                                       (dollars in thousands,
                                       except per share data)

                                         For the Six Months
                                            Ended June 30,

                                        1998            1997
                                    -----------     -----------
Net Sales ....................      $ 2,747,651     $ 2,860,872
Cost of Sales (See Note 2)....        1,937,155       1,966,580
                                    -----------     -----------
    Gross income .............          810,496         894,292
Selling, General and                                           
 Administrative Expenses 
    (See Note 2)..............          560,036         544,340
                                    -----------     -----------
    Income from operations ...          250,460         349,952
Interest Expense .............          (14,976)        (17,062)
Other Deductions, net                                 
    (See Note 3) .............           (2,336)        (23,823)
                                    -----------     -----------
    Income before income taxes          233,148         309,067
Income Taxes .................           75,775         100,446
                                    -----------     -----------
Net Income before cumulative                                   
 effect of accounting changes       $   157,373     $   208,621
                                                               
Cumulative effect of accounting                                
 changes, net of income taxes
 (See Note 2).................              --           15,450
                                    -----------     -----------
Net Income ...................      $   157,373     $   224,071
                                    ===========     ===========
                                                    
Per Share Amounts:

   Basic and Diluted Earnings
     Per Share -

      Net income before cumulative
      effect of accounting changes        $0.72           $0.95

      Cumulative effect of accounting
      changes ..................            --            $0.07
                                    -----------     -----------   

      Net income................          $0.72           $1.02
                                    ===========     ===========
   Cash Dividends...............          $0.54           $0.52
                                    ===========     ===========

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.


                         AMP Incorporated & Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Condensed and Unaudited)

                                                       (dollars in thousands)
                                                        For the Six Months
                                                           Ended June 30,

                                                         1998          1997
                                                      ---------     ---------
Cash and Cash Equivalents at January 1 ...............$ 350,320     $ 223,779 
                                                                              
Operating Activities:                                                         
      Net Income .....................................  157,373       224,071 
      Noncash adjustments -                                                   
         Depreciation and amortization ...............  207,675       220,059 
         Cumulative effect of accounting changes 
           (See Note 2)...............................      --        (22,889)
         Changes in operating assets and liabilities . (124,449)      (72,621)
      Other, net .....................................    7,932        13,417 
                                                      ---------     --------- 
         Cash provided by operating activities .......  248,531       362,037 
                                                      =========     ========= 
                                                                              
Investing Activities:                                                         
      Additions to property, plant and equipment ..... (246,338)     (230,234)
      Other, net .....................................   18,520        27,603 
                                                      ---------     --------- 
         Cash used for investing activities .......... (227,818)     (202,631)
                                                      ---------     --------- 
Financing Activities:                                                         
      Changes in short-term debt .....................     (662)       17,119 
      Proceeds from long-term debt ...................   50,497        35,355 
      Repayments of long-term debt ...................  (29,362)      (35,221)
      Purchases of treasury stock ....................  (45,519)         (981)
      Dividends paid ................................. (118,370)     (113,998)
                                                      ---------     --------- 
         Cash used for financing activities .......... (143,416)      (97,726)
                                                      ---------     --------- 
Effect of Exchange Rate Changes on Cash ..............   (6,174)       (1,411)
                                                      ---------     --------- 
Cash and Cash Equivalents at June 30 .................$ 221,443     $ 284,048 
                                                      =========     ========= 
                                                                              
Changes in Operating Assets and Liabilities:                                  
      Receivables ....................................    5,974      (118,296)
      Inventories ....................................   (4,562)      (28,814)
      Other current assets ...........................   (1,797)      (10,223)
      Payables, trade and other ......................  (72,147)       (2,392)
      Accrued payrolls and employee benefits .........   17,384        33,197 
      Other accrued liabilities ......................  (69,301)       53,907 
                                                      ---------     --------- 
                                                       (124,449)      (72,621)
                                                      =========     ========= 
                                                                    
Interest paid during the periods was approximately equal to amounts charged to
expense.

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.


               AMP Incorporated & Subsidiaries
                 CONSOLIDATED BALANCE SHEETS
                          (Condensed)

                                         (dollars in thousands)

                                         June 30,   December 31,
                                           1998         1997
                                        ----------   ----------
                                       (Unaudited)
ASSETS
Current Assets:
  Cash and cash equivalents .........   $  221,443   $  350,320
  Securities available for sale .....       80,618       79,350
  Receivables .......................    1,013,370    1,051,422
  Inventories
    Finished goods and work in
      process .......................      504,760      491,688
    Purchased and manufactured parts.      280,556      314,375
    Raw materials....................      112,708      102,156
                                        ----------   ----------
    Total inventories................      898,024      908,219
  Other Current Assets ..............      262,384      260,489
                                        ----------   ----------
      Total current assets ..........    2,475,839    2,649,800
                                        ----------   ----------
Property, Plant and Equipment .......    4,686,214    4,627,419
  Less - Accumulated depreciation ...    2,788,746    2,711,434
                                        ----------   ----------
      Property, plant and equipment,                           
       net ..........................    1,897,468    1,915,985
                                        ----------   ----------
Investments and Other Assets ........      296,333      282,318
                                        ----------   ----------
TOTAL ASSETS ........................   $4,669,640   $4,848,103
                                        ==========   ==========
                                                               
LIABILITIES AND SHAREHOLDERS' EQUITY                           
                                                               
Current Liabilities:                                           
  Short-term debt ...................   $  442,793   $  465,233
  Payables, trade and other .........      397,057      487,863
  Accrued liabilities ...............      466,550      492,200
                                        ----------   ----------
      Total current liabilities......    1,306,400    1,445,296
Long-Term Debt ......................      168,010      159,695
Other Liabilities and                                          
  Deferred Credits ..................      296,748      291,577
                                        ----------   ----------
      Total liabilities .............    1,771,158    1,896,568
Shareholders' Equity ................    2,898,482    2,951,535
                                        ----------   ----------
TOTAL LIABILITIES AND SHAREHOLDERS'                            
 EQUITY .............................   $4,669,640   $4,848,103
                                        ==========   ==========
                                                     

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.

                         AMP Incorporated & Subsidiaries

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                           (June 30, 1998, Unaudited)

 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and the notes thereto included in the Company's latest
annual report and Form 10-K.

     The information furnished reflects all adjustments, which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods.

     The following table presents a reconciliation of the shares used to
calculate earnings per share as well as per share amounts:


<TABLE>
<CAPTION>

                             For the Three Months Ended June 30,              For the Six Months Ended June 30,
---------------------------------------------------------------------   ---------------------------------------------
                                 1998               1997                          1998                    1997
---------------------------------------------------------------------   ---------------------------------------------
                            Shares      EPS       Shares        EPS        Shares        EPS       Shares        EPS
<S>                      <C>           <C>      <C>            <C>      <C>            <C>      <C>            <C>

Basic Calculation        219,189,167   $0.25    219,622,835    $0.49    219,400,081    $0.72    219,611,371    $1.02

Dilutive Securities -
   Primarily Options         339,913                256,858                 378,160                 282,277
---------------------------------------------------------------------   --------------------------------------------
Diluted Calculation      219,529,080   $0.25    219,879,693    $0.49    219,778,241    $0.72    219,893,648    $1.02
=====================================================================   ============================================
</TABLE>

2.   ACCOUNTING CHANGES

     Effective January 1, 1998, AMP Incorporated, the United States parent
company, consolidated the majority of its operating divisions and reorganized
into functional organizations, including manufacturing, materials management,
engineering, and finance. As a result of this change, certain manufacturing
administrative functions are now included in general and administrative
expenses, a classification that is consistent with the Company's subsidiaries.
The prior period amounts have been reclassified to provide for consistent data
comparisons.

     In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
For interim periods, SFAS No. 130 permits footnote presentation of a description
of the impact of SFAS No. 130 on the Company, total comprehensive income, any
material components of total comprehensive income for the periods presented, and
cumulative other comprehensive income. Under SFAS No. 130, comprehensive income
is defined as the total of net income and all other non-owner changes in equity.
The Company's non-owner changes in equity include: unrealized holding
gains/(losses) on securities classified as available-for-sale under FASB
Statement No. 115 and foreign currency translation adjustments accounted for
under FASB Statement No. 52. The adoption of SFAS No. 130 involves new
disclosure requirements only and did not impact the reported financial position
or results of operations.

     Total comprehensive income and its components are as follows:
<TABLE>
<CAPTION>
                                          For the Three Months Ended:        For the Six Months Ended:
                                         ----------------------------      -----------------------------
                                         June 30, 1998  June 30, 1997      June 30, 1998   June 30, 1997
                                         ----------------------------      -----------------------------
<S>                                         <C>           <C>                 <C>             <C>
Net income                                  $54,797       $107,293            $157,373        $224,071
Unrealized losses on securities              (5,563)          (195)             (1,813)         (4,018)
Cumulative translation adjustment           (13,155)         9,494             (49,837)        (46,838)
                                         ----------------------------      -----------------------------
Total comprehensive income                  $36,079       $116,592            $105,723        $173,215
                                         ============================      =============================
</TABLE>

     Cumulative other comprehensive (loss)/income was ($24,944) and $26,706 at
June 30, 1998 and December 31, 1997, respectively.

     During the first quarter of 1997, the Company made two changes to the
accounting practices used to develop its inventory costs. The first change was
made to standardize globally the definition of capacity used to determine volume
assumptions for overhead rates. The new definition more properly reflects the
Company's objectives for plant and equipment utilization and provides for
consistent measurements of AMP facilities.

     In an effort to provide increased focus on engineering efforts for both
product development and manufacturing cost reductions, the Company also changed
its inventory costing methodology to include manufacturing engineering costs in
inventory costs. Previously, these costs were expensed in the period incurred
and included in Cost of Sales on the Consolidated Statement of Income.

     The net benefit of the preceding changes in accounting for inventory of
$15.5 million, or $.07 per share, was presented as a cumulative effect of
accounting changes on the Consolidated Statement of Income for the six months
ended June 30, 1997.

3.   IMT/CONNECTWARE LITIGATION

     In the second quarter of 1997, the Company recorded a litigation reserve of
$17.7 million pretax ($0.05 per share) through Other Deductions, net, in
connection with the IMT/Connectware arbitration decision of July 1, 1997. This
litigation was settled on September 12, 1997 and resulted in a payment to IMT in
the third quarter of 1997.

4.   SUBSEQUENT EVENTS

     The Company announced, on June 26, 1998, a voluntary early retirement
program to approximately 2,200 U.S. employees who are at least 55 years of age
and have ten years of service. The enrollment period is in effect from July 6,
1998 through August 15, 1998. The specific financial impact of the early
retirement program will be recorded as a restructuring charge in the third
quarter when the Company is able to estimate the cost of the program based upon
those who elected to enroll. This program involves relatively little immediate
cash outlay by the Company since it is primarily funded by an existing defined
benefit pension plan.

     The Company also announced, in July 1998, several additional actions that
will take place over the remainder of 1998. These actions include reduction of
staff support functions by approximately 3,500 employees worldwide, outsourcing
of selected support functions, plant consolidations, certain divestitures of
product lines, and sales initiatives. The product line divestitures are not
material to the related charges to be taken.

     The reduction of staff support functions will be through a combination of
the previously announced early retirement program, attrition, and the
involuntary separation of employees. Examinations of the Company's primary
business processes for streamlining continue and will result in the
identification of the specific positions to be eliminated or outsourced.

     A restructuring charge for plant consolidations will also be recorded in
the third quarter related to the Company's globalization of its Terminal and
Connector manufacturing operations. Key elements of the globalization plan are
the transfer of manufacturing to the regions where the product is sold and/or
where costs are lowest, and the consolidation of plants into larger scale,
integrated facilities.  The execution of this plan will extend beyond 1998.

     The sales initiatives include a change in the Company's business practices
with certain distributors, the simplification of product pricing, 24-hour
customer service, guaranteed 24-hour shipment of selected parts, and the
establishment of customer support teams and large account enterprise agreements.
These changes are being made to make the Company more competitive and responsive
to customers.

     Currently, revenues are recognized upon shipments to distributors in
accordance with contractual terms. The Company has announced a new program to
qualifying distributors whereby most inventory will be owned by the Company and
managed in an integrated fashion, regardless of the channel through which it is
sold. The Company will maintain ownership of inventory at certain distributor
sites and record revenue at the time the product is shipped to the distributor's
customer. Upon initial implementation, there will be a reduction in sales for
the transfer of the inventory from the distributors to the Company. Both the
sales reduction and the associated charge to profit will be recorded in the
second half of 1998 as the distributors accept and qualify for these new terms.
In addition, a cash outlay for the amount of the inventory return offset by any
amounts due to the Company may be required.

     As a result of the above actions, special charges of approximately $200
million to $250 million are expected to be recorded by the Company in the second
half of the year, with most charges anticipated in the third quarter. The cash
impact of the special charges is currently estimated at $100 million to $130
million. As a significant portion of these charges and the related cash impact
is associated with the reduction of indirect headcount, these estimates could
vary significantly depending on the number of individuals terminating under the
early retirement program or involuntary separation. The expected future
annualized benefit to operating income as a result of these actions is
approximately $200 million.

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

     Net sales for the second quarter of 1998 were $1.353 billion, down 7.9% in
U.S. dollars and 4.5% in local currencies from the $1.468 billion in the
corresponding prior year quarter. For the six months ended June 30, 1998, net
sales were $2.748 billion, representing a decrease of 4.0% in U.S. dollars from
the $2.861 billion for the six months ended June 30, 1997. On a local currency
basis, sales for the six months ended June 30, 1997, were essentially flat with
the comparable prior year period. The continued strength of the U.S. dollar
reduced sales by approximately $50 million in the quarter and $108 million for
the six months ended June 30, 1998.

     Bookings for the second quarter were $1.306 billion, down 8.4% from first
quarter bookings of $1.426 billion. The Company's order backlog stood at $921
million at June 30, 1998, representing a $49 million, or 5.1% decrease from
March 31, 1998.

     Sales in the Americas Region, approximately 49% of total sales, were down
8.9% for the quarter ended June 30, 1998 as compared to the corresponding prior
year quarter. U.S. net sales decreased 9.7%, while Canada, Mexico, and Argentina
also saw a decrease in sales from the comparable prior year quarter. Local
currency sales in Brazil saw double digit growth over the second quarter of
1997. For the six months ending June 30, 1998, net sales were down 5.1% from the
comparable prior year period. This downturn was driven by weakness in the
Communications and Personal Computer industries.

     Asia/Pacific sales, approximately 18% of total sales, were down 7.1% in
local currencies and 17.3% in U.S. dollars for the quarter ended June 30, 1998
as compared to the corresponding prior year quarter. For the six months ending
June 30, 1998, net sales were down 2.7% in local currencies and 11.5% in U.S.
dollars from the comparable prior year period. Sales in Japan were down 9.8% in
local currency and 20.7% in U.S. dollars from the comparable prior year quarter
and 7.3% in local currency and 14.9% in U.S. dollars from the six months ended
June 30, 1997. Weakening sales throughout the Asia/Pacific region, primarily
caused by the economic slowdown in Japan and throughout the region, has had a
negative impact on the Communications, Motor Vehicles, and the Consumer,
Industrial, and Power industries, while sales in the Personal Computer industry
were up slightly.

     Europe, Middle East and Africa sales, approximately 33% of total sales,
increased 3.6% in local currencies, but were flat in U.S. dollars for the
quarter ended June 30, 1998 as compared to the corresponding prior year quarter.
Growth was steady in Germany, France, and Spain, while down in Great Britain and
Italy. For the six months ending June 30, 1998, net sales increased 8.5% in
local currencies and 2.7% in U.S. dollars from the comparable prior year period.
Growth was led primarily by the Motor Vehicles and Consumer, Industrial, and
Power industries, while the Personal Computer and Communications industries
weakened further.

     Gross income decreased to 27.7% of net sales for the quarter ended June 30,
1998, from 32.2% in the year-earlier quarter. The primary driver of this
decrease was increased volume variances associated with significantly lower
levels of production resulting from less demand and the use of inventory on hand
for order fulfillments. For the six months ending June 30, 1998, gross income
decreased to 29.5% of net sales from 31.3% in the comparable prior year period.

     Selling, general and administrative expenses (S,G&A) increased to 21.0% of
net sales for the quarter ended June 30, 1998 from 19.3% in the year earlier
quarter. The increase is primarily due to the lower level of sales in the second
quarter of 1998 as expenses are flat in reported dollars and up approximately 3%
in local currencies. For the six months ending June 30, 1998, S,G&A increased 6%
in local currencies to 20.4% of net sales from 19.0% in the comparable prior
year period due to flat sales.

     Net income for the second quarter of 1998 was $54.8 million, down $52.5
million from $107.3 million in the year-earlier quarter. Basic and diluted
earnings per share were $0.25, down 49.0% compared to $0.49 in the second
quarter 1997. Earnings per share in the second quarter of 1997 were negatively
impacted by a $17.7 million pretax charge ($0.05 per share) for a litigation
reserve recorded in Other Deductions, net.

     Capital expenditures for the second quarter 1998 were $ 139.2 million, up
27.4% from $109.3 million in the prior year quarter. For the six months ending
June 30, 1998, capital expenditures were $246.3 million, up 7.0% from $230.2
million in the comparable prior year period. Although capital expenditures have
increased over 1997 levels, the Company continues to focus on improving existing
asset utilization and productivity.

     MANAGEMENT ACTIONS

     In order to position the Company to achieve its strategic financial
objectives and in light of recent business performance, management announced
several actions to provide sales growth and reduce infrastructure costs.

     The Company announced, on June 26, 1998, a voluntary early retirement
program to approximately 2,200 U.S. employees who are at least 55 years of age
and have ten years of service. The enrollment period is in effect from July 6,
1998 through August 15, 1998. The specific financial impact of the early
retirement program will be recorded as a restructuring charge in the third
quarter when the Company is able to estimate the cost of the program based upon
those who elected to enroll. This program involves relatively little immediate
cash outlay by the Company since it is primarily funded by an existing defined
benefit pension plan.

     The Company also announced, in July 1998, several additional actions that
will take place over the remainder of 1998. These actions include reduction of
staff support functions by approximately 3,500 employees worldwide, outsourcing
of selected support functions, plant consolidations, certain divestitures of
product lines, and sales initiatives. The product line divestitures are not
material to the related charges to be taken.

     The reduction of staff support functions will be through a combination of
the previously announced early retirement program, attrition, and the
involuntary separation of employees. Examinations of the Company's primary
business processes for streamlining continue and will result in the
identification of the specific positions to be eliminated or outsourced.

     A restructuring charge for plant consolidations will also be recorded in
the third quarter related to the Company's globalization of its Terminal and
Connector manufacturing operations. Key elements of the globalization plan are
the transfer of manufacturing to the regions where the product is sold and/or
where costs are lowest, and the consolidation of plants into larger scale,
integrated facilities.  The execution of this plan will extend beyond 1998.

     The sales initiatives include a change in the Company's business practices
with certain distributors, the simplification of product pricing, 24-hour
customer service, guaranteed 24-hour shipment of selected parts, and the
establishment of customer support teams and large account enterprise agreements.
These changes are being made to make the Company more competitive and responsive
to customers.

     Currently, revenues are recognized upon shipments to distributors in
accordance with contractual terms. The Company has announced a new program to
qualifying distributors whereby most inventory will be owned by the Company and
managed in an integrated fashion, regardless of the channel through which it is
sold. The Company will maintain ownership of inventory at certain distributor
sites and record revenue at the time the product is shipped to the distributor's
customer. Upon initial implementation, there will be a reduction in sales for
the transfer of the inventory from the distributors to the Company. Both the
sales reduction and the associated charge to profit will be recorded in the
second half of 1998 as the distributors accept and qualify for these new terms.
In addition, a cash outlay for the amount of the inventory return offset by any
amounts due to the Company may be required.

     As a result of the above actions, special charges of approximately $200
million to $250 million are expected to be recorded by the Company in the second
half of the year, with most charges anticipated in the third quarter. The cash
impact of the special charges is currently estimated at $100 million to $130
million. As a significant portion of these charges and the related cash impact
is associated with the reduction of indirect headcount, these estimates could
vary significantly depending on the number of individuals terminating under the
early retirement program or involuntary separation. The expected future
annualized benefit to operating income as a result of these actions is
approximately $200 million.

     YEAR 2000

     The Company's estimates regarding incremental S,G&A and capital expenses in
1998 specific to the completion of the information systems phase of Year 2000
compliance remain unchanged from the estimates stated in the Company's Report on
Form 10-K for the year ended December 31, 1997 and Annual Report to
Shareholders. With respect to operational Year 2000 compliance issues, the vast
majority of the Company's products are, by their nature, not date dependent.
However, certain of the Company's manufacturing, logistics, administrative and
facility systems and equipment use embedded computer technology. The Company is
working with an outside consultant and using a specific methodology to identify
necessary actions and develop a plan for addressing embedded technology issues
within the Company. Further, this plan includes an assessment of suppliers and
customers. Thus far, the incremental internal costs and external expenses for
the operational compliance phase in 1998 have not been significant due to the
use of existing Company resources for inventorying assets and contacting
suppliers. The total additional incremental internal costs and external expenses
for the operational compliance phase cannot be determined until the assessment
of embedded technology is complete. At this time the Company does not anticipate
any material negative impacts related to Year 2000 issues; however, the Company
is reliant in part on the effective execution by customers and suppliers in
dealing with these issues. Accordingly, recognizing the many factors affecting
the Company which are outside of the Company's control, such as suppliers of
goods and services (including municipalities and utilities), the Company is not
able to state it will be completely unaffected by the Year 2000.

     CONVERSION TO THE EURO

     Since 1997 the Company has been assessing the potential impact of the
January 1, 1999 conversion in European Union countries to a common currency -
the Euro. By the end of 1998, the Company anticipates being capable, in Europe,
of accepting orders and invoicing in the Euro. At this time, the Company does
not anticipate any material negative impacts related to the conversion to the
Euro.

     DIVIDEND ACTION

     On July 22, 1998, the Board of Directors declared a regular quarterly
dividend of 27 cents per share, payable Tuesday, September 1, 1998 to
shareholders of record at the close of business on Monday, August 3, 1998.

     FUTURE ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes accounting
and reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded on the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate, and assess the effectiveness
of transactions that receive hedge accounting.

     SFAS No. 133 is effective for fiscal years beginning after June 15, 1999.
Early adoption at the beginning of any quarter after issuance is permitted, but
cannot be applied retroactively. The provisions of the statement must be applied
to derivative instruments and certain derivative instruments embedded in hybrid
contracts that were issued, acquired, or substantively modified after December
31, 1997.

     The Company has not yet quantified the impacts of adopting SFAS No. 133 on
its financial statements and has not determined the timing of or method of
adoption. However, the Statement could increase volatility in earnings and
comprehensive income.


ITEM 3. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in quantitive and qualitative
disclosures in 1998. Reference is made to Item 7A in the Annual Report on Form
10-K for the year ended December 31, 1997.

CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR"
--------------------------------------------------------

     Statements in this Report on Form 10-Q that are not strictly historical
facts are "forward-looking" statements that should be considered as subject to
the many uncertainties that exist in the Company's operations and business
environment. These uncertainties, which include economic and currency
conditions, market demand and pricing, competitive and cost factors, and the
like, are set forth in the Company's Report on Form 10-K for the year ended
December 31, 1997 filed with the Securities and Exchange Commission on March 30,
1998.

PART II.  OTHER INFORMATION


ITEM 5.  OTHER INFORMATION

     Notice of Deadlines for Shareholder Proposals for 1999 Proxy Statement

     The deadline for submitting a shareholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 1999 annual
meeting of shareholders pursuant to Rule 14a-8, "Shareholder Proposals," of the
Securities and Exchange Commission's Regulation 14A is November 16, 1998.

     The date after which notice of a shareholder proposal submitted outside
the procedures of Rule 14a-8 is considered untimely is January 29, 1999.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (A)  Exhibits --

      Exhibit
      Number                      Description
      -------                     -----------

       3(ii) -      Bylaws of the Company, as amended July 22, 1998

       10.A  -      Executive Severance Agreements dated October 22, 1997
                    between the Company and certain of the Company's Executive
                    Officers; with amended Appendix listing the Executive
                    Officers and noting differences between the agreements
                    entered with each Executive Officer.

       10.B  -      Employee Share Purchase Plan, effective July 1, 1998

         27  -      Financial Data Schedule

     (B)  Reports on Form 8-K --

            There were no reports on Form 8-K for the three months ended June
            30, 1998.
<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.

Date:  July 31, 1998                   AMP INCORPORATED
                                         (Registrant)


                                 By:   /s/  William S. Urkiel
                                 ----------------------------------
                                   William S. Urkiel
                                   Vice President and Chief Financial Officer


                                 By:  /s/  Mark E. Lang
                                 ----------------------------------
                                   Mark E. Lang
                                   Controller


                                  EXHIBIT INDEX
                                  -------------

      Exhibit
      Number                              Description
      -------                             -----------

       3(ii) -      Bylaws of the Company, as amended July 22, 1998

       10.A  -      Executive Severance Agreements dated October 22, 1997
                    between the Company and certain of the Company's Executive
                    Officers; with amended Appendix listing the Executive
                    Officers and noting differences between the agreements
                    entered with each Executive Officer.

       10.B  -      Employee Share Purchase Plan, effective July 1, 1998

         27  -      Financial Data Schedule