[PAGE]




                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.   20549
                                   FORM 10-Q



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



      For the Quarter Ended             July 31, 1998                         



      Commission File Number                1-4925                             



                                    HARCOURT GENERAL, INC.                    

                  (Exact of name of registrant as specified in its charter)

                  Delaware                                         04-1619609 

      (State or other jurisdiction of                       (I.R.S. Employer  

      incorporation or organization)                       Identification No.)



      27 Boylston Street, Chestnut Hill, MA                              02467
      (Address of principal executive offices)                      (Zip Code)



                                      (617) 232-8200                         
                 (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         





As of  September 9,  1998, the number  of outstanding  shares of  each of  the
issuer's classes of common stock was:

           Class                                        Outstanding Shares   


Common Stock, $1 Par Value                                  50,989,392
Class B Stock, $1 Par Value                                 20,021,006

                                       <PAGE>
[PAGE]


                            HARCOURT GENERAL, INC.


                                   I N D E X



Part I. Financial Information                                     Page Number

  Item 1.   Condensed Consolidated Balance Sheets as of
              July 31, 1998 and October 31, 1997                        1

            Condensed Consolidated Statements of Operations for
              the Nine and Three Months Ended
              July 31, 1998 and 1997                                    2

            Condensed Consolidated Statements of Cash Flows for
              the Nine Months Ended July 31, 1998 and 1997              3

            Notes to Condensed Consolidated Financial Statements        4-6

  Item 2.   Management's Discussion and Analysis of 
              Financial Condition and Results of Operations             7-11




Part II.    Other Information

  Item 6.   Exhibits and Reports on Form 8-K                            12

Signatures                                                              13


Exhibit 27.1                                                            14

                                       <PAGE>
[PAGE]
<TABLE>
                                        HARCOURT GENERAL, INC. 
                                 CONDENSED CONSOLIDATED BALANCE SHEETS
                                              (UNAUDITED)

<CAPTION>
(In thousands)                                        July 31,    October 31, 
                                                          1998           1997 
                                                   -----------    -----------
Assets
<S>                                                 <C>            <C>
Current assets:
  Cash and equivalents                              $   70,847     $   82,644 
  Undivided interests in NMG Credit                            
    Card Master Trust                                  165,906        128,341 
  Accounts receivable, net                             507,427        397,675 
  Inventories                                          734,266        676,357 
  Deferred income taxes                                120,546        120,546 
  Other current assets                                  76,141         79,353
                                                    ----------     ----------
    Total current assets                             1,675,133      1,484,916 

Property and equipment, net                            616,796        593,892 

Other assets:
  Prepublication costs, net                            227,861        201,953 
  Intangible assets, net                             1,283,047      1,299,227
  Other                                                205,155        201,405 
                                                    ----------     ----------
    Total other assets                               1,716,063      1,702,585
                                                    ----------     ----------

    Total assets                                    $4,007,992     $3,781,393 
                                                    ==========     ==========
Liabilities and Shareholders' Equity
Current liabilities:
  Notes payable and current maturities of
    long-term liabilities                           $   79,221     $   14,439 
  Accounts payable                                     362,039        346,386 
  Taxes payable                                         90,310         19,433 
  Other current liabilities                            622,597        613,011
                                                    ----------     ----------
    Total current liabilities                        1,154,167        993,269 

Long-term liabilities:
  Notes and debentures                               1,272,150      1,289,889 
  Other long-term liabilities                          292,719        274,840
                                                    ----------     ----------
    Total long-term liabilities                      1,564,869      1,564,729 

Deferred income taxes                                  143,435        143,435 
 
Minority interest                                      262,485        234,422 

Shareholders' equity:
  Preferred stock                                          925          1,125 
  Common stock                                          71,008         70,755 
  Paid-in capital                                      745,365        744,932 
  Cumulative translation adjustments                   (12,912)        (7,113)
  Unrealized investment gains, net                       3,643           -
  Retained earnings                                     75,007         35,839
                                                    ----------     ----------
      Total shareholders' equity                       883,036        845,538
                                                    ----------     ----------

  Total liabilities and shareholders' equity        $4,007,992     $3,781,393 
                                                    ==========     ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.


                                                   1<PAGE>
[PAGE]
<TABLE>
                                        HARCOURT GENERAL, INC. 
                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (UNAUDITED)

<CAPTION>
(In thousands except for
 per share amounts)                   Nine Months            Three Months       
                                      Ended July 31,         Ended July 31,
                               -----------------------  ---------------------
                                     1998         1997        1998       1997 
                               ----------   ----------  ---------- ----------
<S>                            <C>          <C>         <C>        <C>
Revenues                       $3,099,059   $2,700,371  $1,161,670 $1,051,646

Costs applicable to revenues    1,678,568    1,565,710     559,441    546,059 
Selling, general and 
  administrative expenses       1,121,990      989,381     370,530    426,512 
Purchased in-process research
  and development                   -          174,000        -       174,000 
Corporate expenses                 26,434       26,928       9,224      7,988
                               ----------   ----------  ----------  ---------

Operating earnings (loss)         272,067      (55,648)    222,475   (102,913)       

Investment income                   3,984       26,285         623      4,910 
Interest expense                  (80,338)     (66,239)    (26,268)   (24,486)
                               ----------   ----------  ----------  ---------
Earnings (loss) before
  income taxes and minority
  interest                        195,713      (95,602)    196,830   (122,489)
                                          
Income tax expense                (74,371)     (27,647)    (74,795)   (18,505)
                               ----------   ----------  ----------  ---------

Earnings (loss) before 
  minority interest               121,342     (123,249)    122,035   (140,994)

Minority interest in earnings
  of subsidiaries, net of 
  income taxes                    (42,238)         -       (11,235)      -
                               ----------   ----------  ----------  ---------

  Net earnings (loss)            $ 79,104    ($123,249)   $110,800  ($140,994)
                               ==========   ==========  ==========  =========
Weighted average number of
  common and common equivalent
  shares outstanding:

  Basic                            70,843       70,832      70,912     70,747
                               ==========   ==========  ==========  =========
  Diluted                          72,132       70,832      72,142     70,747 
                               ==========   ==========  ==========  =========
Earnings (loss) per common
  share:

  Basic                          $   1.11     ($  1.75)   $   1.56     ($2.00)
                               ==========   ==========  ==========  =========
  Diluted                        $   1.10     ($  1.75)   $   1.54     ($2.00)
                               ==========   ==========  ==========  =========
Dividends per share:

  Common Stock                   $    .57      $   .54   $     .19    $   .18
                               ==========   ==========  ==========  =========
  Class B Stock                  $   .513      $  .486   $    .171    $  .162
                               ==========   ==========  ==========  =========
  Series A Stock                 $  .6495      $ .6165   $   .2165    $ .2055
                               ==========   ==========  ==========  =========



</TABLE>
See Notes to Condensed Consolidated Financial Statements.

                                                   2<PAGE>
[PAGE]
<TABLE>
                                        HARCOURT GENERAL, INC.
                            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (UNAUDITED)

<CAPTION>
(In thousands)                                                            
                                                                Nine Months  
                                                              Ended July 31,
                                                         ---------------------
                                                              1998       1997
                                                         ---------  ---------
Cash flows from operating activities:
<S>                                                      <C>        <C>
  Net earnings (loss)                                    $  79,104  ($123,249)
  Adjustments to reconcile net earnings (loss)
    to net cash provided by operating activities:
      Depreciation and amortization                        219,934    250,674 
      Minority interest                                     42,238        -    
      Purchased in-process research and 
        development                                           -       174,000 
      Other items                                           (6,012)     9,533 
    Changes in current assets and liabilities:
      Accounts receivable                                 (106,589)   (84,394)
      Inventories                                          (51,586)   (58,087)
      Other current assets                                   6,028     18,069 
      Accounts payable and other current liabilities        53,419     44,931 
      Taxes payable                                         68,645    (57,232)
                                                         ---------   --------
Net cash provided by operating activities                  305,181    174,245 
                                                         ---------   --------
Cash flows from investing activities:                    
  Capital expenditures                                    (190,245)  (128,694)
  Purchases of available-for-sale securities                  -      (408,304)
  Sales of available-for-sale securities                      -       325,767 
  Maturities of available-for-sale securities                 -       324,591 
  Purchases of held-to-maturity securities                (513,362)  (457,784)
  Maturities of held-to-maturity securities                475,797    421,121 
  Acquisition of NEC, net of cash acquired                    -      (839,620)
  Acquisition of Chef's Catalog                           (31,000)       -
  Acquisition of Steck-Vaughn minority interest           (40,512)       -
  Other acquisitions and investing activities             (29,223)     (6,751)
                                                        ---------    --------
Net cash used for investing activities                   (328,545)   (769,674)
                                                        ---------    --------  
Cash flows from financing activities: 
  Proceeds from borrowings                                 55,000     516,950 
  Repayment of debt                                        (3,557)   (329,500)
  Repurchase of Common Stock                                  -       (20,139)
  Cash dividends paid                                     (39,936)    (37,844)
  Other equity transactions                                    60         165 
                                                        ---------    --------
Net cash provided by financing
  activities                                               11,567     129,632 
                                                        ---------    --------
Cash and equivalents:
  Decrease during the period                              (11,797)   (465,797)
  Beginning balance                                        82,644     532,862 
                                                        ---------    --------
  
  Ending balance                                         $ 70,847   $  67,065 
                                                        =========   =========

</TABLE>
See Notes to Condensed Consolidated Financial Statements.

                                                   3<PAGE>
[PAGE]



                            HARCOURT GENERAL, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                                  (UNAUDITED)

1. Basis of presentation
   ---------------------
  The  Condensed Consolidated Financial  Statements of  Harcourt General, Inc.
  (the Company)  are submitted in  response to  the requirements of  Form 10-Q
  and  should  be   read  in  conjunction  with  the   Consolidated  Financial
  Statements  in the Company's Annual Report  on Form 10-K.  In the opinion of
  management, these  statements contain  all adjustments,  consisting only  of
  normal recurring accruals,  necessary for a fair presentation of the results
  for the interim  periods presented.  The  consolidated financial  statements
  of The Neiman Marcus  Group, Inc. (NMG) are  consolidated with a lag  of one
  fiscal  quarter.   NMG is a separate  public company which  is listed on the
  New York Stock Exchange and is subject to the reporting requirements of  the
  Securities Exchange Act of 1934.  The Company  owns approximately 53% of the
  common stock of NMG.  The Company does  not include in its net earnings that
  portion  of  NMG  earnings  (currently 47%)  attributable  to  the  minority
  shareholders.  

  The Company's  businesses  are  seasonal in  nature,  and  historically  the
  results of  operations for  these periods  have not  been indicative of  the
  results for the full year.  

2. Acquisition of minority interest in Steck-Vaughn Publishing Corporation
   -----------------------------------------------------------------------
  On January 30, 1998,  the Company completed its acquisition of  the minority
  interest  in Steck-Vaughn  Publishing Corporation  for $14.75  per share, or
  approximately  $40.5   million.    The  consideration   due  to  the  former
  shareholders of Steck-Vaughn  was paid in  February 1998.   The  transaction
  had the  effect of increasing goodwill  by $29.7 million  and decreasing the
  Company's minority interest by $10.9 million on its balance sheet.

3. Earnings per share
   ------------------
  Pursuant to the provisions  of Statement of Financial Accounting  Standards
  No. 128,  "Earnings per Share," the  net earnings (loss) and  the number of
  weighted  average shares used  in computing basic and  diluted earnings per
  share (EPS) are as follows:

<TABLE>
<CAPTION>
                                  Nine Months Ended       Three Months Ended
                              ----------------------   ---------------------
                              July  31,   July  31,    July 31,    July  31,
   (in thousands)                  1998        1997        1998         1997 
                              ---------   ---------    --------    ---------
   <S>                         <C>       <C>           <C>         <C>        
   Earnings (loss)             $ 79,104  ($123,249)    $110,800    ($140,994)
   Less: dividends on Series
      A Cumulative Convertible
      Stock                        (673)      (701)       (205)         (232)
   Earnings (loss) for         --------  ---------     -------     ---------
      computation of basic EPS   78,431  ( 123,950)     110,595    ( 141,226)
   Add: dividends on assumed
      conversion of Series A
      Cumulative Convertible 
      Stock                         673        -            205          -     
                               --------  ---------     --------    ---------
   Earnings (loss) for 
      computation of diluted 
      EPS                      $ 79,104   ($123,950)   $100,800    ($141,226)
                               ========   =========    ========    =========
                                    
</TABLE>

                                                   4<PAGE>
[PAGE]

                            HARCOURT GENERAL, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

<TABLE>
3. Earnings per share   (continued)
<CAPTION>
                                  Nine Months Ended       Three Months Ended
                                ---------------------    ---------------------
                                July  31,   July  31,    July 31,    July  31,
    (in thousands)                   1998        1997        1998         1997 
                                ---------   ---------    --------    ---------
    <S>                            <C>         <C>         <C>          <C>
    Shares for computation of 
         basic EPS                 70,843      70,832      70,912       70,747

    Add: assumed conversion of 
         Series A Cumulative 
         Convertible Stock          1,178          -        1,113         -  

    Add: effect of assumed 
         option exercises             111          -          117         -  
                                ---------   ----------   --------     --------
    Shares for computation 
         of diluted EPS            72,132       70,832     72,142       70,747
                                =========   ==========   ========     ========
</TABLE>
   In the  nine months and three  months ended July 31,  1998, all outstanding
   options to purchase shares of common stock were included in the computation
   of diluted EPS.  Options to purchase 493,754 shares of common stock and the
   assumed conversion  of 1,130,000 shares of Series  A Cumulative Convertible
   Stock were  not included in the  computation of diluted EPS  because of the
   net loss in the three and nine months ended July 31, 1997.  

4. Acquisitions
   ------------
   In May 1998,  the Company signed a  definitive merger agreement to  acquire
   Mosby,  Inc.  from Times  Mirror  for approximately  $415 million  in cash.
   Mosby   is  a publisher  of books  and  periodicals in  professional health
   sciences, including nursing, allied health and medicine.  Completion of the
   transaction is  subject to normal terms and  conditions, including approval
   under the Hart-Scott-Rodino Antitrust Improvements Act.  After the closing,
   Mosby will become part of the Company's Worldwide Scientific, Technical and
   Medical Group. 

   In July 1998, the  Company signed a definitive merger  agreement to acquire
   Gartner  Learning, the  technology-based IT  training operation  of Gartner
   Group, Inc.  On August 31, 1998, the transaction was completed, and Gartner
   Learning was  merged  with the  operations  of NETg,  a subsidiary  of  the
   Company, which  provides self-paced, multimedia training  courseware for IT
   professionals.   The acquisition  will be accounted for  under the purchase
   method  of accounting.   Under the  terms of  the agreement,  Gartner Group
   received  an eight percent interest in the  combined company, which will be
   known as NETg, as part of the consideration for the acquisition.

   In  the third  quarter  of fiscal  1998,  the Company  completed  its final
   purchase  price  allocation  for  its  June 1997  acquisition  of  National
   Education Corporation (NEC).  The final  purchase price allocation resulted
   in  a net   reduction of  goodwill and  other current  liabilities from the
   amounts initially recorded.

5. NMG debt offering
   -----------------
   In May 1998, NMG  issued $250 million of senior notes and debentures to the
   public,  comprised of  $125 million 6.65%  senior notes  due 2008  and $125
   million  7.125% senior debentures due 2028.   NMG used the proceeds of this
   debt  offering to  repay  borrowings outstanding  on  its revolving  credit
   agreement. 


                                       5<PAGE>
[PAGE]

                            HARCOURT GENERAL, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

6. Recent accounting developments
   ------------------------------
   In February 1998,  the Financial Accounting  Standards Board (FASB)  issued
   Statement of Accounting  Standards No. 132,  "Employers' Disclosures  about
   Pensions and other  Postretirement Benefits" (SFAS 132).  Upon  adoption in
   fiscal 1999, the Company  will provide the additional  disclosures required
   by SFAS 132.

   In  June 1998,  the  FASB  issued  SFAS  133,  "Accounting  for  Derivative
   Instruments and Hedging Activities",  which will require recognition of all
   derivatives as either  assets or liabilities  on the balance sheet  at fair
   value.  The Company is currently evaluating the effect of implementing SFAS
   133, which will be effective for fiscal 2000.









































                                       6<PAGE>
[PAGE]

                            HARCOURT GENERAL, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


                             Results of Operations
<TABLE>
   The  following table  presents  revenues and  operating earnings  (loss) by
   business segment.
<CAPTION>
                                       Nine Months               Three Months
                                       Ended July 31,            Ended July 31,  
                                ------------------------   ----------------------
      (In thousands)                 1998          1997          1998        1997
                                ---------    ----------    ----------   ---------
      <S>                      <C>           <C>           <C>          <C>
      Revenues:   
       Publishing and 
       educational services    $1,262,441    $  987,789    $  613,938   $  545,114 
       Specialty retailing      1,836,618     1,712,582       547,732      506,532
                               ----------    ----------    ----------   ----------
        Total revenues         $3,099,059    $2,700,371    $1,161,670   $1,051,646
                               ==========    ==========    ==========   ==========
      Operating earnings:
       Publishing and 
        educational services   $  121,879    $   87,703    $  183,478   $  138,123 
       Purchased in-process
        research and development
        and other charges            -         (277,227)         -        (277,227)
                               ----------    ----------    ----------   ----------
       Total publishing and
        educational services      121,879      (189,524)      183,478     (139,104)
       Specialty retailing        176,622       160,804        48,222       44,180 
       Corporate expenses         (26,434)      (26,928)       (9,225)      (7,989)
       Total operating         ----------    ----------    ----------   ----------
        earnings (loss)        $  272,067      ($55,648)     $222,475    ($102,913)
                               ==========    ==========    ==========   ==========
</TABLE>
   Nine Months Ended July 31, 1998 Compared To Nine Months Ended July 31, 1997

   Publishing and Educational Services
   -----------------------------------
   Revenues  from the  Harcourt  Brace  publishing  and  educational  services
   businesses increased $274.7 million, or  27.8%, compared to the same period
   last year, primarily as a result of revenues generated  by the NEC entities
   acquired in June  1997 and by Churchill  Livingstone acquired in  September
   1997.    The  Education  Group's revenues  rose  15.8%  to  $470.6 million,
   reflecting  primarily  the   addition  of  the  Steck-Vaughn   supplemental
   educational publishing business and higher secondary and college publishing
   sales.  Revenues of the Lifelong Learning and Assessment Group increased to
   $439.5 million from $269.3 million in the first nine months of fiscal 1997.
   The  increase in  this group's  revenues  resulted from  the newly-acquired
   operations of ICS  Learning Systems and  NETg and to  a lesser extent  from
   higher scoring and  test administration revenues.  The  operations of Drake
   Beam Morin, the Company's professional  services and outplacement business,
   are now included  in this group.   The Worldwide Scientific,  Technical and
   Medical (STM)  Group revenues increased 12.9%  in the first nine  months of
   fiscal  1998 to  $352.3  million,  primarily  due  to  the  acquisition  of
   Churchill Livingstone in September 1997.

   The  publishing  and educational  services  businesses generated  operating
   earnings  of  $121.9 million  in  the first  nine  months  of fiscal  1998,
   increasing by  $311.4 million from an  operating loss of  $189.5 million in
   the first  nine months of  fiscal 1997.   The 1997  period included  $277.2
   million of purchased in-process research and  development and other charges
   incurred  concurrently with the acquisition of  NEC.  The Education Group's
   operating earnings increased primarily as  a result of higher revenues  and
   lower  amortization   costs  in  its  elementary,   secondary  and  college
   businesses as well as higher profits at Steck-Vaughn.  

   Operating earnings of the Lifelong Learning  and Assessment Group increased
   significantly in  comparison to the same period in the prior year both as a
   result of  strong  sales by  its  professional education  and  testing  and
   assessment businesses,  as well as the  inclusion of the  operations of ICS

                                      7<PAGE>
[PAGE]

                                 HARCOURT GENERAL, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

Publishing and Educational Services (continued)
-----------------------------------
and NETg for the full nine  months in the  1998 period, offset  in part by
higher amortization costs.  Worldwide  STM Group earnings  decreased slightly
in the 1998  period primarily as a result  of weaker performance by the
international businesses, principally due to economic conditions in Asia.

Specialty Retailing
-------------------
Specialty   retailing  results  are  reported  with  a  lag  of  one  quarter.
Accordingly, the operating results of The Neiman Marcus  Group, Inc. (NMG) for
the thirty-nine weeks  ended May 2,  1998 are consolidated with  the Company's
operating results for the nine months ended July 31, 1998.

Revenues in  the thirty-nine weeks ended  May 2, 1998 increased  7.2% to $1.84
billion  from  $1.71 billion  in  the  thirty-nine weeks  ended  May  3, 1997.
Comparable sales  for the period  increased 6.2%.   Neiman  Marcus Stores  and
Bergdorf Goodman revenues rose in the first thirty-nine weeks of fiscal  1998,
reflecting  comparable  sales  increases  of  7.2%  and  9.8%,   respectively.
Revenues at NM  Direct increased in comparison to  the prior year period  as a
comparable revenue decline was more than  offset by sales from Chef's Catalog,
a  direct marketer  of gourmet  cookware and  high-end kitchenware,  which was
acquired by NMG in January 1998.

Operating earnings increased 9.8% to $176.6 million from $160.8 million in the
prior period  primarily as a result  of the higher sales  volume combined with
proportionately lower buying and occupancy costs, as well as higher markups at
both Neiman  Marcus Stores and  Bergdorf Goodman.   The increase  in operating
earnings was offset in part by higher selling and catalogue circulation  costs
at NM Direct.

Investment Income
-----------------
Investment income decreased to $4.0  million compared to $26.3 million in  the
same  nine  month period  in  1997.   The  Company  liquidated its  investment
portfolio in June 1997 to partially fund the acquisition of NEC.

Interest Expense
----------------
Interest expense increased  to $80.3 million  from $66.2  million in the  same
period last year.   The increase in  interest expense is primarily due  to the
interest incurred on fixed-rate debt issued by the Company in August 1997, the
proceeds from  which were used to  partially fund the acquisitions  of NEC and
Churchill  Livingstone.   The interest  expense in  the first  nine  months of
fiscal 1998 includes a lower amount  of interest incurred by NMG in comparison
to the  1997 period, resulting from  both a lower effective  interest rate and
lower average borrowings by NMG.

Minority Interest
-----------------
The  Company recorded  minority  interest in  the  earnings of  its  specialty
retailing operations of $42.2 million in the first nine months of fiscal 1998.
The Company began recognizing the minority interest in NMG  (currently 47%) in
its  statement of  operations in the  fourth quarter  of fiscal 1997.   In the
first nine months of fiscal 1997, the Company recorded 100% of the earnings of
NMG  to the  extent that  the Company  had previously  absorbed losses  of NMG
applicable to the minority  interest.  The Company fully  recovered previously
absorbed losses in the fourth quarter of 1997.


                                      8<PAGE>

[PAGE]                                             

                            HARCOURT GENERAL, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


Three Months Ended July 31, 1998 Compared to Three Months Ended July 31, 1997 

Publishing and Educational Services
-----------------------------------
Revenues  from   the  Harcourt  Brace  publishing   and  educational  services
businesses increased by $68.8 million, or 12.6%, to $613.9 million compared to
the same period last year, primarily as a result  of revenues generated by the
NEC entities acquired in June 1997.  The Education Group revenues rose 3.1% to
$305.2  million,  primarily  reflecting  the  addition  of  the   Steck-Vaughn
supplemental educational publishing business and higher secondary and  college
publishing  sales.   Revenues of  the Lifelong  Learning and  Assessment Group
increased to  $175.3 million from $131.1 million in the same period last year.
The increase  in this  group's revenues  resulted from  the operations  of ICS
Learning Systems and NETg acquired in June  1997 and from substantially higher
sales  of professional education and  testing and assessment  businesses.  The
Worldwide  Scientific, Technical  and Medical  (STM) Group  revenues increased
13.2%  to  $133.5  million, primarily  due  to  the  acquisition of  Churchill
Livingstone in September 1997 and increased sales at Academic Press.

The   publishing  and  educational  services  businesses  generated  operating
earnings of $183.5 million in the third quarter of fiscal 1998, an increase of
$322.6 million compared to  a loss of $139.1 million in  the fiscal 1997 third
quarter.   The  1997 period  included $277.2  million of  purchased in-process
research  and development  and other  charges incurred  concurrently with  the
acquisition  of  NEC.   The  Education  Group's  operating earnings  increased
primarily as a  result of strong sales of its  secondary and college products,
as  well as from  higher sales and  lower amortization costs  at Steck-Vaughn.
The  operating earnings  of the  Lifelong Learning  and Assessment  Group rose
substantially in comparison to the 1997  period primarily as a result of lower
amortization costs  and improved  performance  in its  professional  education
business  as well  as ICS  and  NETg for  the quarter.    Worldwide STM  Group
operating earnings  declined in  the  1998 quarter  primarily as  a result  of
higher  provisions  taken in  the quarter  for returns  and  bad debts  in its
international operations. 

Specialty Retailing
-------------------
Results  of NMG are reported  with a lag  of one quarter.   Accordingly, NMG's
operating results for its quarter ended  May 2, 1998 are consolidated with the
Company's operating results for the quarter ended July 31, 1998.

Revenues in  the thirteen  weeks ended  May 2, 1998  increased 8.1%  to $547.7
million  over revenues in  the thirteen weeks  ended May 3,  1997.  Comparable
sales for the period increased 5.6%.  Higher comparable sales at Neiman Marcus
Stores  and  Bergdorf  Goodman  in  the  thirteen  weeks  ended  May  2,  1998
contributed to the increase in  revenues over the same period in  fiscal 1997.
NM  Direct also  contributed  to the  increase, as  sales  generated from  the
recently  acquired Chef's Catalog more than offset a comparable sales decrease
in the fiscal 1998 period.

Operating earnings increased 9.1% to $48.2 million in the thirteen week period
ended May 2, 1998  compared to $44.2 million in the same period in 1997.  This
increase was primarily due to higher sales and higher markups at Neiman Marcus
Stores and Bergdorf Goodman.  The increase in operating earnings was offset in
part by  higher catalogue  circulation  costs, and  to a  lesser extent,  pre-
opening expenses associated with the Neiman Marcus store under construction in
Hawaii.

                                      9<PAGE>
[PAGE]

                            HARCOURT GENERAL, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS 
Investment Income
-----------------
Investment income decreased $4.3 million to $.6 million compared with the same
period last year, due primarily to a lower average portfolio balance resulting
from the use of approximately $554  million in cash and short-term investments
to partially fund the acquisition of NEC.

Interest Expense
----------------
Interest expense  increased 7.3% to $26.3 million compared to $24.5 million in
last year's third quarter.  The increase is primarily due to interest incurred
on fixed-rate debt issued by the Company in August 1997, the proceeds of which
were used to partially fund the acquisitions of NEC and Churchill Livingstone.

Minority Interest
-----------------
The Company  recorded a  minority interest  in the  earnings of  its specialty
retailing  operations of  $11.2 million  in the  third quarter  of 1998.   The
Company began recognizing the minority interest in NMG (currently  47%) in its
statement of operations in the fourth quarter of 1997.

                        Liquidity and Capital Resources
                        -------------------------------

The  following   discussion  analyzes  liquidity  and   capital  resources  by
operating,  investing and financing  activities as presented  in the Company's
condensed consolidated statement of cash flows.

Cash provided  by operating activities for the nine months ended July 31, 1998
was $305.2 million.  The publishing and educational services business segments
provided  $188.4  million  of  cash  from  operations  while NMG's  operations
provided $116.8 million.  The cash provided by the publishing and  educational
services  businesses was sufficient to  fund their working capital expenditure
requirements as well as  the Company's dividend requirements.   NMG used  cash
provided  by operations and borrowings under its revolving credit agreement to
fund  working capital and capital  expenditures.  The  primary items affecting
the  Company's working capital were an increase in accounts receivable ($106.6
million), an  increase in merchandise  inventories ($51.6 million),  offset in
part  by  an  increase in  accounts  payable  and  accrued liabilities  ($53.4
million) and an increase in taxes payable ($68.6 million).

Cash  flows used  by  investing activities  were $328.5  million for  the nine
months  ended  July 31,  1998.   The  Company's investing  activities included
capital expenditures  totaling $190.2  million.   Publishing  and  educational
services capital expenditures  in the  nine month period  ended July 31,  1998
totaled  $132.5  million  and were  related  principally  to  expenditures for
prepublication costs.  Capital expenditures  in the publishing and educational
service  businesses are expected to approximate $180.0 million in fiscal 1998.
Specialty  retailing capital  expenditures  in the  1998 period  totaled $57.7
million and  were primarily related to the construction of a new Neiman Marcus
store  in Hawaii,  which  will  open in  September  1998,  and existing  store
renovations.  Capital expenditures for NMG in fiscal 1998 were $81.2 million.

Financing activities reflect  short term  borrowings by the  Company of  $58.4
million,  incremental borrowings by NMG  of $10.6 million  under its revolving
credit agreement, as well  as the repayment and termination  of Steck-Vaughn's
revolving credit agreement in the amount of $14.0 million.

At July  31, 1998, the Company  had $705.0 million available  under its $750.0
million revolving  credit facility with  18 banks.   The agreement expires  in
July 2002.  NMG had $350.0  million available at May 2, 1998 under  its $650.0
million revolving credit facility, which expires in October 2002. 

                                      10<PAGE>

[PAGE]

                            HARCOURT GENERAL, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS 

                  Liquidity and Capital Resources (continued)
                  -------------------------------

In  May 1998,  NMG issued  $250 million  of senior  notes and  debentures, the
proceeds of which  were used to  repay borrowings  under its revolving  credit
facility.

The Company  believes its cash on hand, cash generated from operations and its
current  and  future debt  capacity will  be  sufficient to  fund  its planned
capital growth,  operating and dividend  requirements, and the  acquisition of
Mosby, Inc.

Year 2000
---------

The Company  has evaluated the  effect of the  year 2000 date  on its computer
systems and is implementing plans to ensure  its systems and applications will
efficiently process information necessary to support ongoing operations in the
year  2000 and  beyond.  The  Company is  engaging both  internal and external
resources to  reprogram and test  its systems for  year 2000 compliance.   The
Company currently  anticipates substantially completing the  year 2000 project
in June  1999.  Based on  management's current estimates, the  costs of system
modifications  and enhancements,  which  have been  and  will be  expensed  as
incurred,  are not expected to be material to the results of operations or the
financial position of  the Company.   Additionally, the  Company continues  to
invest  in new technology in  connection with its  ongoing systems development
plans.    The  Company  has  initiated  communications  with  its  significant
suppliers  and  customers  to determine  the  extent  to  which the  Company's
interface systems and operations are vulnerable to failure of those parties to
rectify  their own  year 2000  issues.   There can  be no  assurance  that the
systems  of other  companies  on  which the  Company's  systems rely  will  be
converted  on a  timely  basis and  will not  have  an adverse  effect on  the
Company's operations.

Forward-Looking Statements
--------------------------

Statements  in  this  report  referring  to  the  expected  future  plans  and
performance  of the  Company  are forward-looking  statements.   Actual future
results may differ materially from such statements.  Factors that could affect
future performance  in  the  Company's  publishing  and  educational  services
businesses include, but  are not limited to: the  Company's ability to develop
and market its products and services; the relative success of the products and
services  offered  by competitors;  integration  of  acquired businesses;  the
seasonal and  cyclical nature of  the markets  for the Company's  products and
services;  changes in economic conditions;  changes in public  funding for the
Company's  educational  products  and  services;  and  changes  in  purchasing
patterns in the Company's markets.

Important factors  that  could  affect future  performance  in  the  Company's
specialty retailing businesses  include, but  are not limited  to: changes  in
economic conditions or consumer confidence, changes in consumer preferences or
fashion  trends;  delays  in  anticipated  store  openings;  adverse   weather
conditions, particularly  during peak selling seasons;  changes in demographic
or  retail  environments;  competitive  influences;  significant increases  in
paper, printing and  postage costs;  and changes in  NMG's relationships  with
designers and other resources.   For more information, see NMG's filings  with
the Securities and  Exchange Commission.


                                      11<PAGE>

[PAGE]

                                    PART II





Item 6.  Exhibits and Reports on Form 8-K.

         (a)  Exhibits.
              --------

                27.1   Financial data schedule


         (b)  Reports on Form 8-K.
              -------------------

              The Company did not file any reports on Form 8-K during the
              quarter ended July 31, 1998.












































                                      12<PAGE>


[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 hereunto duly authorized.

                                          HARCOURT GENERAL, INC.



Date: September 11, 1998                  /s/ John R. Cook
                                          John R. Cook
                                          Senior Vice President and
                                          Chief Financial Officer



Date: September 11, 1998                  /s/ Catherine N. Janowski
                                          Catherine N. Janowski
                                          Vice President and Controller



































                                      13<PAGE>